The UK housing market is “making the most” of several tailwinds, as the sector demonstrated its resilience in the face of the global pandemic.

Summary:

• Property prices in the UK rose 7.5% in 2020, the highest annual increase for six years
• New policy changes and pent-up demand following the national lockdown drove momentum in the property market
• A strong first quarter of growth is also highly predicted in 2021

UK property has long been renowned for its strength and resilience by generations of global investors.

And few years have underlined these credentials quite like 2020.

Despite the challenges and uncertainty posed by the global coronavirus pandemic, as well as Brexit negotiations, UK property achieved strong annual growth and underlined its ongoing importance to the health of the economy.

According to building society Nationwide, property prices in the UK increased 7.5% in 2020, marking the fastest annual growth rate since 2014.

Put into the wider context of the pandemic, average prices at the end of the year were 5.3% higher than the prevailing level in March, when the UK’s first national lockdown in response to rising coronavirus cases began.

As lockdown measures eased in the summer, a wave of pent-up demand of buyers keen to make their moves in the market drove activity. This was also buoyed by a number of newly introduced policies that supported jobs, and also the stamp duty holiday which runs until the end of March 2021.

“There are several tailwinds and the housing market is making the most of them,” commented Mark Harris, Chief Executive of mortgage broker SPF Private Clients.

Looking ahead, many market analysts believe this confidence should continue in 2021. Lifestyle changes created by the lockdown will have reset priorities for many home buyers and tenants, encouraging new moves.

George Franks, Co-Founder of London-based estate agents Radstock Property, commented: “After a strong first quarter of 2021, prices are likely to cool in the wake of the stamp duty deadline but could then start to increase again towards the end of the year.”

In September, Savills’ five-year property price growth forecasts predicted a natural flatline in growth in all areas of the UK collectively in 2021, before strong growth over the next four years. By 2024, Savills expect average UK property prices to increase by 20.4%.