British Housing Market Activity to Crash in 2021
Recent research by the Centre for Economic and Business Research (CEBR) indicates that the housing market in the UK is heading towards a crash next year after the current mini-boom it is experiencing after the lockdown restrictions were lifted. Property prices in the UK could fall by 13.8% in 2021 after the recent surge in demand even as a recession is underway in the region.
The study maintains that the spike in sales and prices underway presently is temporary and house prices could start declining by as early as the end of this year. The current surge in activity in the housing market has been attributed to the stamp duty holiday in England and Northern Ireland, pent up demand, furlough scheme and a pause on some repossessions and forced sales.
While the furlough scheme is expected to end in the coming weeks, mortgage possessions are due to resume by the end of next month. The other contributing factor, stamp duty holiday, will last until April.
The CEBR notes that the increased activity in the housing market during the summer could have been “skewed towards higher-value properties, distorting some of the unofficial [mortgage lender] data. Our analysis suggests that prices will start to fall significantly towards the end of the year and the first half of 2021.”
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