House prices in the United Kingdom rose by 8.5% throughout 2020, this marks the largest annual growth rate for the nation since October 2014, according to new official figures released by the government.
In December 2020, the average price of a house in the UK hit £252,000, which is equivalent to $355,370 in the United States. Government leaders believe this increase is due to the pandemic, but also due to the stamp duty holiday which is projected to finish at the end of March this year.
The Office for National Statistics released figures this week that showed north-west England as experiencing the highest growth in pricing. Housing rose by 11.2%% last year for that sector, and prices in London rose by just 3.5%. By the end of 2020 the average price of a home in England was around $327,048 in American currency (£269,000).
“In Wales prices grew 10.7% to an average of £184,000 ($223,706). Scotland had an 8.4% increase to an average of £163,000 ($198,174), while in Northern Ireland a house would typically set buyers back £148,000 ($179937) – up 5.3% on the figure for December 2019,” according to reports.
The fact that so many individuals have been working from home during the Covid-19 pandemic has obviously stunted how many individuals are willing to put their homes on the market during the worst global health and economic crisis in decades. There’s simply not enough supply to meet the demand, even if that demand is exponentially smaller than normal.
The Office for National Statistics also claimed that the average price of detached properties rose by 10% in 2020 compared to a 5% growth in pricing for flats and maisonettes.
“Recent price increases may reflect a range of factors, including pent-up demand, some possible changes in housing preferences since the pandemic, and a response to the changes made to property transaction taxes across the nations.”
In July 2020 the chancellor announced a stamp duty holiday as a means of getting the property market moving. The holiday released property purchases in England and Northern Ireland up to the value of £500,000 ($607,897) from tax payments, according to reports.
Sarah Coles is a personal finance analyst in the US who claims there’s already hopeful signs that the market will begin to cool down. “Early calculations from Halifax are that house prices fell back 0.3% in January, while the RICS survey showed sales had plummeted, and estate agents expect things to get worse as we go through the spring. A shortage of properties on the market should keep prices from falling, but there’s not going to be a great deal of enthusiasm for more rises.”
Coles went on to explain that “the chancellor could breathe some new life back into the market in the budget if he makes some kind of concession for people mid-sale when the stamp duty rules change. However, there’s no guarantee he’ll do this, and, even if he does, buyers and sellers may be reluctant to get back into the race.”
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at firstname.lastname@example.org.