The first quarter of the year has seen an increase of 5.7percent. At least that’s what the latest index released by the famous GetAgentwebsite indicates. The biggest factor behind this rise has been the stamp dutyholiday introduced by the government last year. But all that the stamp dutyholiday has done is provided a certain support to the housing market.
It can be considered an artificial bubble injected into themarket to keep it afloat and protect it from a collapse, which it was at thebrink of, by the way. Nonetheless, the fact of the matter is that the housingmarket is flourishing in the country and it can be easily witnessed by thefollowing economic indicators:
1. Current House Prices
The current housing market prices reflect a clear increasefrom last year. The UK House Price Index shows this increase to be 8.6 percent.The same index also mirrors a steady 0.5 percent increase in the average pricesin the current year from month to month.
However, house prices varied greatly in each region. TheYorkshire, for example, saw an increase of 10.9 percent, whereas, the Northwestand the Midlands witnessed 11.9 percent and 10.6 percent increase respectively.Surprisingly, at just 4.6 percent, the slowest growth was seen in London.
2. Mortgage Approvals During the Pandemic
Another leading economic indicator of the housing market isthe Bank of England’s data on approved mortgages to finance purchases.Fortunately, that data also shows a visible increase compared to the record lowit witnessed during the mid-2020.
The current increase was recorded at 19.5 percent. Speakingin plain numbers, the mortgage finance cases approved were 14,287 more than theones approved during the same period last year.
These figures are from February 2020 to February 2021.Unfortunately, though these number reflect an annual increase in theapplications approved, if we compare January 2021 data with February 2021, wesee a decrease of 9.9 percent.
3. Number of Housing Starts and Completed
Another economic factor, and final in the list of this post,is the comparison between the number of houses began construction and thenumber of them completed. The first lockdown, back in the second quarter of2020, hit the construction real hard.
But that number has risen since. According to the availabledata 42,110 houses started building in the last quarter of 2020. That is a 16percent increase from the third quarter and a 24 percent increase compared to2019’s fourth quarter.
The fourth quarter of 2020 also witnessed completion of46,950 houses. This recorded a 4 percent increase when compared to the thirdquarter of 2020 and a 6 percent increase when compared with the last quarter of2019.
Even though these indicators show strong resistance andgradual continuous growth in the housing market, all of these point towardsonly one thing, the stamp duty holiday.
Upon scrutinising all the available data, it is clear thatthe market was only able to contain itself after the stamp duty holiday periodbegan. Fortunately, that period has been increased to September this year. Theextension will help sustain this probability of increase in the housing marketprices for the next two quarters of the current year. But that will only happenif the lockdown restrictions are gradually loosened.
