Official figures released for November 2020 show that average house prices in the UK have undergone a significant increase over the year and London is leading the way with the average price for a London property exceeding £500,000 for the first time.
Average house prices in the UK have increased 7.6% over the year to November 2020, standing at a record high of £250,000, the highest annual growth rate seen in the UK since June 2016.
The average price of properties all over the United Kingdom has increased, not just England but Scotland, Wales, and Northern Ireland have all seen a dramatic increase. However, London remains the most expensive out of any region in the UK.
London was tied with Yorkshire and The Humber as the English region with the highest annual house price growth, with prices increasing by an average of 9.7% in the year to November 2020.
There are a lot of factors that have been observed to have caused this but the most significant appear to be the break in stamp duty, changes in housing preferences, the temporary reduction in property transaction tax, and pent up demand leading to a boom in sales in the country’s capital.
The temporary break on stamp duty covering homes costing up ot £500,000 in England has led to a significant boom in sales and pushed up the price of properties that benefit the most from that saving. This break is set to end on 31st March 2021 (though there is pressure on the Government to for this to be extended) and it is likely that this imminent increase is a large part of the boom in London prices. That is combined with a demand for more spacious homes.
It is also worth noting that London is a region in the UK with a relatively high proportion of properties that are bought for the purposes of investment from cash buyers and overseas investment. The break in stamp duty and the temporary property tax changes have made London properties far more desirable since London properties are typically more expensive and therefore come with higher rates of tax and stamp duty. Many of these investors are looking to beat the end of the break in stamp duty and the introduction of new tax rates in April.
A further boom in sales in London is also predicted due to the large number of property owners leaving London after being tempted by the prospect of working from home in other areas of the UK like the coast and the countryside. Without the need to work in the city, many people felt that they longer needed to live in the nation’s capital. Property listing site Rightmove has seen a record number of listings. Many families are leaving London for the countryside, but there is an increasing level of interest in properties in the capital from both investors and international buyers looking to find properties once overseas travel is available once again.
Some predict that, as offices reopen, the city centre will be revitalised and there will be yet another spike in the number of people looking to move to the capital.
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