After 18 months of frenetic house sales, 2021 is on track to be a record year with house sales set to top 1.5 million, adding up to £473bn worth of business.
Zoopla reports that the pace of this year’s market has proved almost unprecedented, driven by a national re-evaluation of housing, low mortgage rates and the additional boost from the stamp duty holiday.
Its monthly House Price Index reveals that house price growth is currently running at 6.6% – despite a marked regional disparity, ranging from 2.3% in London to 10.4% in Wales. Looking ahead to the end of the year, demand is expected to surpass levels recorded at the end of 2020 and is on track to continue into 2022.
But it predicts that the housing market will slow next year, with transactions expected to drop by 20% to 1.2m, in line with the long-run average, but still relatively high compared to the last decade. UK house price growth is expected to slow to 3%, says Zoopla, with above-average growth set to continue in the most affordable markets, where current growth is highest.
This will be greatest in the North West and East Midlands (4%) and weakest in London at 2% over the next year.
The predominant market challenges will stem from sellers’ unrealistic expectations around sales prices and a lack of homes for sale deterring new entrants to the market.
Richard Donnell (pictured), Zoopla’s executive director, says: “2021 is set to be a record year for the housing market with the most moves by homeowners since 2007 and nearly £500bn of home sales. The impact of the pandemic on the housing market has further to run but at a less frenetic pace. We expect the momentum in the market to outweigh some emerging headwinds from higher living costs and the risk of higher mortgage rates.”