The prices of homes in the North West are expected to rise by 4% this year.
This figure has been revealed after global real estate services provider, Savills, has released its upgraded forecasts for the “second hand” housing market in the year ahead, which is based on Nationwide Building Society’s house price index.
Researchers at Savills had previously expected house prices to remain flat in 2021 across the UK, but a number of measures to support the market which were included in Chancellor Rishi Sunak’s Budget announcements last week, combined with the easing of lockdown measures, have led them to revisit their forecasts.
Lucian Cook – Head of Residential Research at Savills – said 2021 had initially been set to be “a complex and uneven year” for the housing market, but added that “the outlook has improved since the beginning of the year given the speed of the vaccination programme, the expected relaxation of social distancing measures and government support for both jobs and the housing market”.
The property group has calculated that nearly £50,000 will be added to the average UK house price between December 2020 and the end of 2025.
And by the end of 2025, house prices should have increased by 28.8% in the North West of England.
As is to somewhat be expected nowadays, Savills has predicted that housing markets further away from London – such as in Greater Manchester and the North West as a whole, where house prices tend to be lower – have more potential for prices to grow.
Savills said that a key reason for larger price rises in parts of the country, like the North West, was simply that there was more capacity for growth, with Lucian Cook adding: “The expectation that interest rates will stay lower for much longer than was predicted pre-pandemic means there remains capacity for medium-term house price growth despite the unexpectedly strong performance of last year.
“Across the country as a whole, five-year price growth of around 20% looks sustainable without unduly depleting mortgage affordability.”
During last week’s 2021 Budget, it was announced that temporary lifting of the stamp duty threshold in England and Northern Ireland is to be extended until the end of June, and a new government guarantee for lenders to support the return of 95% mortgages will be introduced.
“With the introduction of the mortgage guarantee scheme, [it] underpins our expectation of 1.4 million transactions in 2021,” Mr Cook concluded.