House prices are challenging to predict at the best of times and after a year of unpredictability, it will likely be even more difficult to foresee how the market will play out.
People tend to think that house prices constantly go up, however, this is somewhat of a misconception. Over the past 20 years, prices have fluctuated year on year, so picking the right time to buy or sell your property can be important.
Despite this, house prices have seen an upward trend over the past few decades, and this will likely continue over the next few decades.
What will happen to house prices in 2021?
There are a lot of different factors that affect the housing market, but overall, house prices are predicted to grow around 4% in 2021. Spring is usually the busiest time in the property market and is often considered one of the best times for both buying and selling. It will be interesting to see whether this trend will continue throughout 2021 after a tumultuous 2020 where the market almost came to a complete standstill from March to June.
At the end of the initial lockdown in June 2020, there was a boom in the housing market as everyone who had been unable to move in the previous months was actively looking to sort a new property as soon as possible. Thankfully, the second lockdown in November didn’t have much of an impact on the housing market and with things starting to get back to normal, the market has been continuing to stabilise as 2021 progresses.
With more people spending less in 2020 and therefore being able to save more, there’s a strong chance many people will be looking to secure a new property in 2021. This is another indication that prices may rise, as the demand for property rises, the price is likely to follow.
2021 Property prices in the North East of England
The property market tends to vary in performance in different regions of the UK. The price of properties in the North East have risen 8.5% since March 2020 as the value of property continues to rise across the majority of the UK.
The North East has seen the third highest annual house price change in the UK since March 2020, with the North West and Yorkshire & the Humber the only regions seeing more of a rise in the value of properties. This will likely be good news to those looking to sell their property in the North East, however, it may make it more difficult for potential buyers that need to save up a larger deposit.
As of January 2021, the average house price in the North East was £138,151. On average, the North East is the cheapest region in the UK for property and this is expected to stay the same for the upcoming year.
Property prices: What’s to come next?
As the market continues to recover from the covid-19 pandemic, prices look set to continue to rise in the near future. Savills have predicted that over the five-year period to the end of 2025, it is anticipated that the price of residential property across the UK will grow around 21.1%.
Thanks to the extension of stamp duty, the robust action in the housing market is expected to be prolonged. The UK government has also introduced a mortgage guarantee scheme, which allows aspiring buyers to apply for 95% mortgages. The lower deposits will likely appeal to a broader range of buyers, with many first-time buyers looking to put down smaller deposits in order to be able to secure a property.
As house prices in London have reached the limits of affordability, many people are choosing to move to different areas of the UK. Because of this, house prices are expected to rise further over the next decade or so in regions such as the North East, North West and Yorkshire with people looking to move their families to cities such as Newcastle, Leeds, Sheffield and Liverpool.
Nothing is certain; however, everyone needs somewhere to live, which is why property is often considered a safe market to get into. There are many factors that can influence your decision to buy or sell a property and timing is a crucial consideration.
Naturally, if you are looking to sell you will want to choose the time you’re likely to get the highest price – so it’s worth considering which time of the year will work best for you.