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2/2/2021

Property market round-up - January 2021

 
A new month, a new year and the property market seems to be off to a fast start with the UK's biggest property portal having their busiest January ever. A look at the numbers from Nationwide and Zoopla.
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Last year ended with strong gains. Depending on whose index you prefer, values are up between 6% and 7.5% for the year. Supply is likely to be a restraining factor, with new listings down by 12%, potentially pushing prices still higher.
Rightmove report their fastest ever start to a new year, with activity on their website up 30% on a year ago. However, with the stamp duty holiday due to end on 31st March, it is unlikely that those looking now will benefit unless the Chancellor has a change of heart in his spring budget.
The numbers for January -

The big picture - Nationwide

Headlines -
  • Annual house price growth slowed to 6.4%, from 7.3% in December
  • Prices down 0.3% month-on-month, after taking account of seasonal factors
  • Home ownership rises for third year running
 
January 21
December 20
Monthly Change
-0.3%
+0.9%
Annual Change
+6.4%
+7.3%
Average Price
​Not seasonally adjusted
£229,748
£230,920
January saw the annual rate of house price growth slow modestly to 6.4%, from 7.3% in December. House prices fell by 0.3% month-on-month, after taking account of seasonal effects – the first monthly decline since June.

To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase. While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage).

The typical relationship between the housing market and broader economic trends has broken down over the past nine months. This is because many peoples’ housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.

​Robert Gardner, Chief Economist, Nationwide

City-by city - Zoopla/Hometrack

Headlines -
  • The third lockdown is exacerbating a supply/demand imbalance in housing
  • Demand has rebounded faster than last year, but the flow of new supply is slower as sellers are reluctant to list their home while restrictions remain
  • London the only region to register more supply – primarily flats, as owners trade-up for space and/or investors take gains ahead of possible tax changes​
Biggest movers -
  
Average Price
December 20
​y-o-y
December 19
​y-o-y
Liverpool
£127,200
+6.3%
+2.4%
Manchester
£179,900
+6.0%
+3.5%
Nottingham
£165,400
+5.8%
+3.7%
Leeds
£175,300
+5.8%
+2.4%
Leicester
£190,200
+5.0%
+4.0%
House price growth is at a decade high across three regions – North East, North West, Yorkshire and the Humber – in fact growth is running at the highest since before the global financial crisis.

​At a city level, Liverpool has jumped to the top of the growth rankings with house prices rising by 6.3% over the last 12 months – this is the highest annual growth rate for 15 years. Manchester is close behind with a growth rate of +6.0%, back to levels of inflation last seen 2 years ago. Affordability pressures are acting as a drag on price growth across southern England.

​Despite the new lockdown, demand for homes has posted the usual seasonal rebound which has been stronger than last year. Demand for homes is up 13% on this time last year, with new sales agreed also up 8%. This rebound is broadly uniform across all regions and counties.

Zoopla / Hometrack

All content from Nationwide (full report) and Zoopla (full report)

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