The latest data from the government’s UK House Price Index has shown that the property market is experiencing a post-lockdown boom.
The April 2020 UK House Price Index has revealed that the price of a UK property has increased by 2.6% year-on-year, with average values now standing at £234,612.
Despite lockdown measures, the UK’s property market has remained robust once transactions resumed and, with the introduction of supportive measures introduced by the government including Stamp Duty cuts and low interest rates, confidence in the market continues to grow.
Why are UK house prices increasing?
A ‘mini-boom’ has also been reflected in the latest data from high street lender Halifax, which has reported that property prices increased by 1.6 per cent month-on-month in July.
Russell Galley, the managing director at Halifax, said: “The latest data adds to the emerging view that the market is experiencing a surprising spike post-lockdown.
“Supported by the government’s initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago.”
It is thought that pent up demand for housing throughout the lockdown period has contributed to a rise in property values and, with more people working from home, those able to save money have been able to increase their savings throughout the pandemic.
Will UK property prices decrease?
The UK has officially slipped into a recession for the first time in 11 years and with estimates from the Bank of England suggesting that the economy will contract by 9.5 per cent this year, rising property prices seem to contradict the current economic picture.
However, the Bank of England remains optimistic about a fast recovery and predicts a 9 per cent expansion in 2021.
For homeowners and investors buying a property at the right time is a key factor to maximise returns and lessons could be learned from investors who benefitted from buying in the aftermath of the 2008 recession.
Despite the challenges of 2020, there is a bright future for the UK’s economy and the property market. Follow the link and discover how the buy-to-let sector fared during this extraordinary time and our predictions for the rest of the year.