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House buying rebounds after lockdown lull in 2020

Young couple surrounded by cartoons depicting the contents of their dream home

House sales virtually halted in the early weeks of the pandemic last year, but since then buyers have returned and the UK property market is booming.

New data from Halifax shows that over the past year there has been a big increase in the number of people moving home and those buying a property for the first time, thanks to a combination of factors including pent-up demand, the 'race for space' and the stamp duty holiday.

According to the bank's latest Homemover Review, the number of home movers more than doubled (132%) to 265,070 in the first half of 2021 compared to 114,030 in the same period last year.

In the 12 months to June 2021 there were 461,010 home moves, up by more than 50% on the previous 12 months.

In fact, the total number of property moves in the last year is almost 100,000 more than at any point in the last 10 years, and the rate of home moving is at the highest level since 2007, Halifax said.

Despite record house prices, first-time buyers also returned to the market in the first half of this year with transactions climbing to 210,900, an increase of 74% on the same six months last year.

Those taking their first step on the housing ladder accounted for nearly half (44%) of all sales in the period. And Halifax revealed that there were more first-time buyers in the first six months of this year than in the first half of any of the last 10 years.

David Fell of estate agency Hamptons told the Daily Telegraph that the ability to save more during lockdown likely played a significant role in boosting sales.

"New buyers have generally had larger deposits and were more affluent than in previous years," Fell said. "They have also been living at home to maximise the amount they could save."

Many younger buyers have also received extra help from parents. The 'Bank of Mum and Dad' is predicted to help half of all first-time buyers this year, the Telegraph reported, with estate agency Savills forecasting that the average contribution will hit £58,000.

With more competitive mortgage deals available, there has also been an increase in buyers with smaller deposits looking to buy their first home.

Strong demand from both first-time buyers and home movers, combined with a shortage of homes on the market, has kept prices high. The latest monthly report from Nationwide revealed that house prices have risen by 9.9% in the last year and the average cost of a home now exceeds a quarter of a million pounds for the first time.

The average house price was £250,311 in October, compared with £248,742 in September, the building society said.

Since the start of the pandemic in March 2020, the price of a typical UK home has increased by £30,728.

Posted by Fidelius on November 15th 2021

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