House prices are set to soar over the next five years, experts have forecasted. A rise of around 13 per cent between now and 2026 has been predicted by the Office for Budget Responsibility (OBR).
The Covid-19 pandemic, which saw the housing market essentially close for several months, has sparked a greater demand for house moves. More time at home in lockdowns has prompted many to seek bigger homes with more outdoor space and space for home working.
How will house prices be affected?
Experts have already had to reassess previous forecasts as 2021 looks set to be a record-breaking year for house prices. The OBR believes house prices will rise by around 8.6 per cent this year alone. Figures from the Office for National Statistics show house prices rocketed eight per cent between July 2020 and July 2021. The average cost of a home in the UK in July 2021 was £256,000-£19,000, more than in July last year. June 2021 saw a record high average house price of £265,000. But, perhaps surprisingly, London has bucked the trend, seeing the lowest annual growth in July and for the past eight months. Overall, 2021 is set to be a record-breaking year for the housing market with £500 billion of home sales expected.
What does it all mean for home buyers?
As well as a rise in house prices, the annual cost of moving has also risen dramatically. It currently stands at a record high of £11,777, up from £6,877 in June, when the stamp duty holiday was still in force. But while house prices in the capital have not seen the huge rise experienced elsewhere in the UK, in terms of the cost of moving, which includes removals and conveyancing solicitors London home buyers are still expected to stump up more.
Removals and conveyancing costs both spiked during the stamp duty holiday when demand was at its highest but have since fallen again. A shortage of drivers has also been blamed for a rise in removals costs nationwide.