Savills forecast that housing transactions were set to reach 1.4m this year before falling back to normal figures of 1.2m by 2023. For the five years from 2021 to 2025, the group anticipate total house price growth of 21.1%.
With the government extending both the stamp duty holiday and furlough scheme in its Budget, Lucian Cook, Savills head of residential research, said the chancellor had markedly reduced the downside risks for the middle of 2021. The recovering economy would aid house price rises towards the end of 2021, he added.
The readjusted figures follow an unusually robust market in 2020 seeing house prices climb 7.3%. The group noted that this was the first time in modern history that prices had risen during a recession, citing people’s desire to move home outweighing the uncertainty surrounding jobs and finances.
Savills expects markets which are the furthest from London to experience the strongest five-year growth in house prices. North West England and Yorkshire and the Humber are anticipated to lead the market at +28.8% and +28.2% respectively.
Meanwhile, high levels of equity in London and the South East are expected to drive house price growth over the five-year period at +12.6% and +17% respectively. This is “despite high house price to income constraints”.
Lucian Cook said: “2021 is going to be a complex and uneven year, with competing forces impacting the housing market at different points.
“But the outlook has improved since the beginning of the year given the speed of the vaccination programme, the expected relaxation of social distancing measures and government support for both jobs and the housing market.
“Real-time data from TwentyCi tell us that new sales agreed remain well above the pre-pandemic norm, with the same true of mortgage approvals. That points to a strong first half which, together with the introduction of the mortgage guarantee scheme, underpins our expectation of 1.4 million transactions in 2021.”
