House prices are to rise by 4% in 2021, according to Rightmove.
The online letting agent believes house prices will increase, as housing priorities stay high on people’s life agendas.
However, it detailed that price rises for newly marketed properties will be at a slower pace than this year
It is expected that Q1 2021 will be particularly busy due to the stamp duty deadline.
Rightmove noted that there is currently a logjam of 650,000 properties changing hands; this number is unchanged on last month due to strong sales agreed for this time of year.
Looking to Q2, this quarter is anticipated to be slower as average tax saving of 1.9% of purchase price in Great Britain is due to end.
Despite this, ongoing demand and cheap mortgage rates available will help to support continued modest price growth, detailed Rightmove.
Furthermore, Rightmove said that uncertainties remain in 2021, but housing needs and fresh-start mentality suggest the market will continue to outperform, as shown by 53% more prospective buyers contacting estate agents than at this time a year ago
Reflecting back on 2020, average house prices are up 6.6% on 2019, despite a 0.6% decline this month.
Tim Bannister, director of property data at Rightmove, said: “2021 has a lot of variables, and so is not an easy one to call, but with Rightmove’s unique leading indicators of buyer and seller behaviour we are confident that the housing market will continue to outperform general expectations next year as it did this.
“There’s likely to be a lull in quarter two unless the stamp duty holiday is extended, but for many buyers its removal will not be make or break, though may lead them to reduce their offers to a degree to compensate for the higher tax, and indeed many sellers may be prepared to help to mitigate their buyer’s financial loss.
“First-time buyers will remain largely exempt, so in most cases will be no worse off.
“Despite these headwinds, ongoing demand still remains very high, indicating that there’s plenty of fuel left in the tank for the housing market. Interest rates remain at near-record lows, and we expect greater availability of low-deposit mortgages at competitive rates next year.
“These two factors will help to oil the wheels for home purchases by the ‘accidental savers’ who have collectively saved £100bn that they couldn’t spend during the pandemic restrictions.
“With the expectation of a return to more normality in the second half of 2021 and a likely ‘fresh start’ mentality for some, there are sound reasons for continued positive market sentiment that will outweigh the economic, political, and health challenges ahead.”