According to the latest property sales data by Hamptons, house prices looks set to end 2021 around 4.5% higher than a year ago, with a record 1.5 million homes having changed hands. Forecasts also point to further rises over the next three years – sparked by the combination of record-low interest rates, higher loan-to-value mortgage products, and consumer demand for more space and greater work flexibility during the Covid era.

Hamptons’ Housing Market Forecasts report indicates that ,“  second wave of lockdown-induced demand” will see home prices rise by 3.5% in 2022, 3% in 2023 and 2.5% in 2024. The report points to the Office for National Statistics data for evidence of slowing house prices this year. It showed that house prices across the country rose by 8% in the 12 months to July, down from a peak of 13.2% in June.

The Hamptons report says that the end of the stamp duty holiday combined with the fact that house prices were already recovering at the end of last year means it expects price growth to soften to 4.5% in the final quarter of 2021. In 2022, the report predicts: “The desire for more space and the flexibility for workers to split their time between the home and office will continue to stimulate the market in 2022.

“Equity-rich homeowners have dominated property market activity since the start of the pandemic, but we expect a second wave of lockdown-induced demand from those who have been unable to move this year.” Similar pressures will drive price growth in 2023 and 2024.

A record-breaking first half of the year means that more homes will have sold in 2021 than in any year since 2007, with the survey forecasting 1.5 million completions.

The report says: “In 2022, activity will be supported by households who have been unable to move home in 2021 as a result of affordability pressures, job uncertainty, or because they could not find a suitable property.

“First-time buyer numbers should increase next year as the rates on higher loan-to-value mortgage deals become cheaper.”

It forecasts 1.25 million transactions in 2022, adding that, “A growing economy and low-interest rates” will see completions hit 1.3 million in 2023 and 2024.

The report expects rents to rise by 3% this year. But adds: “We forecast that the rapid pace of growth in the rental market will slow in 2022.

“But the rate of increase should still be above pre-pandemic levels, supported by tenants’ willingness to pay for extra space and by unprecedentedly low levels of stock.”

It forecasts that rents will rise by an average of 2.5% in 2022, but adds that further “growth will be dictated by what happens to peoples’ incomes in 2023 and 2024”.

Here at The Financial Planning Group were are busy helping our clients find the best possible Mortgage and Re-Mortgage products to take advantage of record low lending rates.

For example, Nationwide recently launched the lowest ever five-year mortgage deal, with an interest rate of 0.99 per cent, which became the latest sub one percent product to be unveiled as competition among lenders hotted up over the summer – including 0.84% fixed for two years with TSB and 0.96% with HSBC. Deals are available on both a repayment and interest only basis.

Steve Padgham, The Financial Planning Group’s Head of Mortgages, said: “Savvy people certainly get the best rates and speaking to an Independent Mortgage Advisor should always be your starting point to achieving the best available deal on the market.”

If you’d like to discuss ways of securing a great mortgage deal, then please do not hesitate to contact Steve Padgham at The Financial Planning Group via e-mail at Steve.Padgham@fpgonline.co.uk or by calling 020 8614 4782.