The Cost of Property in the UK Is Going up: More People Buy Premium Class Property
Based on the data from all-nation development society Nationwide, the prices for UK property soared and reached the record high in autumn 2020. In October, real estate rates increased by 5.8% compared to the same period in 2019. According to the Nationwide report, the average property rate was £227,826, although it had amounted to £226,129 just a month before.
The authors of the report explain that the cost of UK property has been the highest within 5 years. In September, the price growth was at 5%. During the month, residential properties got 0.8% more expensive (ahead of experts’ forecasts of 0.4%).
The market experts think that the record highs are due to a few factors. Buyers of UK property aim to purchase property before the stamp duty holiday ends. At this point, buyers of UK property valued below £500,000 are exempt of stamp duty. However, the holiday will be over in a few months. ‘Activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March,’ comments Nationwide's Chief Economist Robert Gardner.
Another reason of the skyrocketing prices for UK property is the pandemic. An increasing number of people in the UK are willing to buy a spacious dwelling where they could spend quite a lot of time. Experts say that in October 2020 over 400,000 properties were sold in the UK - at the total of £112 billion.
Curiously, the market is also affected by seasonal fluctuations. By analysts’ estimates, demand for houses with terraces or gardens drops in the autumn. Apparently, wet and cloudy weather shifts the buyers’ focus from open spaces to cosy interiors.
Nationwide’s research revealed that the market activity ‘remained stable’ despite the economic slump and the growing unemployment. The number of approved mortgages went up in September to 91,500 - the highest since 2007. The researchers also emphasise the surge in sale-purchase transactions in premium class property.
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