High end agency Strutt & Parker is doubling its prediction for this year’s house price growth.
For the UK-wide mainstream market the agency says its best-case scenario is now 10 per cent growth for all of 2021, with a downside risk of five per cent growth.
The best-case scenario growth for Prime Central London this year remains at five per cent growth.
Strutts has also upgraded its five-year forecasts, estimating price growth in the UK of between 20 and 35 per cent (previously 15 and 25 per cent); in PCL it remains 15 to 35 per cent.
According to the Nationwide House Price Index UK property prices grew by 10.3 per cent in the 12 months to Q2 2021, exceeding the growth in the year to Q1 2021 which was 6.3 per cent.
Vanessa Hale, head of residential research and insight at Strutt & Parker, comments: “The continued strength of Q2 2021 sales has maintained the positive sentiment that came to fruition in the previous quarter.
“Growth would have to be flat for the rest of the year in order to see annual growth of just five per cent - the previous best-case forecast. However, the continued lack of stock combined with demand are expected to lead to further price rises, albeit at a slower rate than this quarters’ results. This is partially due to the end of the Stamp Duty Holiday and a return to the seasonality of the property market, which was not seen in 2020 because of lockdown.
“Despite the positivity experienced so far in 2021, the threat of Covid-19 and its impact on the market is by no means removed. There is still global economic uncertainty around the pandemic.
“In the UK, uncertainty remains over unemployment and the return to office working, all of which could impact buyer behaviour. However, this increased activity is expected to continue for years; as there has been a permanent shift in behaviour and lifestyles, and the market will take time to adjust to that.”