The UK housing boom: what do the experts say?

At the start of May, a local estate agent told Sky News that the housing market in Cornwall had gone “completely crazy” – and that even renting a property had become increasingly difficult, with diminishing numbers of properties on the market and ever more people looking.

There’s no sign of any let up, said Cornwall Live. Official figures show that house prices across the UK are rising at their fastest pace since the lead up to the financial crisis in August 2007 – up 10.2% in the year to March. But in Cornwall they’ve been rocketing. The average price increase in the county “is more than 50% higher than the national upturn and nearly five times that of parts of the UK”.

Structural shift

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The hard figures chime with anecdotal reports that rural areas have seen “an influx of those fleeing cities”, as people reassess their priorities amid hopes that the freedom to work from home will become a permanent legacy of the pandemic. One of the original explanations for the boom across the country was the drive to take advantage of government incentives, such as the stamp duty holiday, said Kalyeena Makortoff in The Guardian.

But Joe Garner of the mortgage-lender Nationwide detects “a structural shift” towards “larger homes with gardens outside city centres”. That means the surge in buying – and house prices – is likely to continue when incentives end. “People don’t say: ‘Oh look, there’s a discount on stamp duty, let’s move house.’ That’s not how it works,” he said. “People are thinking of their house less as an investment and more as a home.”

Race for space

Data from the property website Zoopla backs this up, said Damian Shepherd in City AM. It reports that London is still trailing “when it comes to house price growth”, chalking up “the slowest regional rate across the UK for the sixth consecutive month” (1.9%).

The “hottest” housing markets – in terms both of price growth and time taken to secure a sale – are, according to Zoopla, Wales, Yorkshire and the Humber, and northwest England, said Kalyeena Makortoff. Overall, the site expects “the total value of houses sold in the UK to reach £461bn this year” – a 46% jump on 2020.