One of the main features of the early stages of the Coronavirus pandemic was a broad worry about how the UK property market would fare. Residential property is such a key part of the national economy that many feared a fall in house prices might have far reaching consequences.
One of those was the Chancellor of the Exchequer who moved to shore up demand for housing by introducing a Stamp Duty Land Tax (SDLT) holiday for buyers. Up until 20th June 2021, buyers paid no Stamp Duty on purchases up to the value of £500,000, with buyers able to save up to £15,000 in total.
From 1st July 2021 to 30 September 2021 the nil rate band will be reduced to £250,000 as the scheme is gradually tapered off, then it will return to the previous level of £125,000 from 1st October.
Other factors which help to increase demand during the pandemic included an extension of the Help to Buy scheme and the Bank of England base rate staying at 0.1% - a historically low level which made borrowing cheaper than ever before and led to another wave of buy to let investors cashing in on UK property.
Finally, even though the construction industry remained open throughout the last year, we are still not building nearly enough homes for all the people who want them. The National Housing Federation has calculated that the UK needs at least 340,000 new homes a year to meet demand, and at present we are building approximately 240,000 a year. Until that gap between supply and demand is met, house prices will keep increasing – and there are no indications that anything will change soon.
Alex Rose, Director of New Homes at Zoopla, said: “Demand for houses is twice as high as typically seen at this time of year between 2017 and 2019, accelerating away from demand for flats, creating a disparity in average price growth across the two property types.
“House prices are being supported in part by a severe shortage of homes for sale, with stock levels down some 25% in the first half of the year compared to 2020.”
With all that in mind, it is no surprise that UK house prices are running very high. Despite a small decrease in the pace of growth in August, Savills has upgraded its residential forecasts and now expects property values to rise 9% over 2021 and a total of 25.1% by the end of 2025.
Prices are rising faster than ever, and many home buyers are beginning to wonder how they can buy UK property and benefit in the same way that buy to let investors do. The short answer is that people looking for their next home should consider purchasing a property off-plan and taking advantage of capital appreciation in the same way landlords do.
Buying off-plan means to reserve and put a deposit down on a property which is still being built. While you will of course have to plan ahead and wait for construction to finish before moving in, the big advantage is that you are buying at a below-market rate and, on completion, will have naturally achieved large returns already. That is especially the case if you buy in a market like Manchester which is leading the UK in house price growth.
For example, our Oxygen development in Manchester city centre is approaching completion and early buyers will have already made large gains on their initial purchase price. Located minutes from Piccadilly Station and with amenities including a swimming pool, sauna, spa, gymnasium, spin room, residents’ lounges, cinema room and more – Oxygen is the perfect home and a magnet for capital appreciation.
By finding developments like Oxygen, home buyers can secure themselves a premium city centre property at the same time as making the most of the capital appreciation building in the UK housing market.
The final units have now been released and the development is due to complete in Q4 2021 – get in touch with our team today for more information about purchasing a property in Oxygen >>
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