Why have UK house prices soared during the pandemic?
By Sarah Davies, Head of Residential Conveyancing
The pandemic has had many impacts; one of the most unexpected has been the rise in the average value of residential property.
At the start of the pandemic it was a popularly held belief that house prices would suffer with many ‘experts’ predicting that house prices would fall by at least 5% this year, and potentially drop by up to 30% over the next 3 years!
In reality, the opposite has been true with average house prices now at record levels. Although plenty have offered opinions as to why this is, nobody seems able to fully pinpoint the actual reason?
Looking back to the last time we faced a national crisis and recession – the financial crisis of 2008 – we see that average house prices fell around 16% from £184,185 in February 2008 to £154,452 in March 2009, a drop of £29,733. Furthermore, prices did not recover their pre crash value until May 2014, over five years later.
Many are predicting difficult times this winter, with unemployment set to rise and businesses struggling to keep the doors open, but the housing market seems set to continue on its upward trend.
What conclusions can we draw? Are we all being hopelessly optimistic that a vaccine is on the way and that life will return to normal early next year, or is this a Stamp Duty/Land Transaction Tax holiday-driven blip that will see house prices soon levelling off and eventually starting to dip?
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Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.
Sources: www.propertydata.co.uk Nationwide Financial Times