With each passing month comes new stats on high house prices, and with average prices now standing at an average of £261,743 in the UK and demand outweighing supply, there could be signs of a housing crash on the horizon.
Are we in a property bubble in the UK?
We are currently in a property bubble in the UK – where we see an increase in house prices fuelled by demand. The ongoing stamp duty holiday, mortgage holidays, and significantly lower mortgage rates are all important catalysts creating a property bubble, which is why we are seeing a property bubble in the UK.
So, will the market crash?
If demand for property decreases at the same time when supply increases, then the bubble bursts –resulting in a housing market crash.
And although this could be a worrying thought, it is highly unlikely that this will happen in the UK. This is because demand for property in the UK continues to be so incredibly high, with people still continuing to move away from flats in cities to more spacious properties. And with many first-time buyers saving money for a deposit during lockdown, this has only fuelled demand for property.
With this in mind, it is unlikely that demand will decrease to the levels necessary for a property crash to happen. As long as demand sustains at normal levels, the property market should remain intact”.
When is a good time to buy a home?
All things considered; I would suggest that now is not the best time to be buying a property in the UK. It is currently a sellers, not a buyers’ market, with house prices at an all-time high and huge competition making it hard for many buyers to find the right house or get the best deal for them. It’s likely anyone looking to buy a home right now will be overpaying for the property, even with discounts such as the stamp duty holiday in place.
If we have learnt anything from this past year it is that the stamp duty holiday has bolstered house prices and made it difficult for buyers. And although the tax break officially ends on June 30, there is a staggering return to previous stamp duty rates until the end of September, so for anyone looking to buy, I would advise them to hold off until October – once the stamp duty holiday has finally come to an end.
Although nothing can be said for certain, house prices and mortgage applications are expected to fall post-deadline as people won’t be rushing to meet the stamp duty deadline, so October onwards could indicate a great time to buy a property in the UK.
*Ross Counsell is a director at GoodMove