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House prices jumped £20k in 2020, ONS / Land Registry reveals

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A dash for detached homes and the hunt for more space in lockdown helped send the average house price in the UK up £20,000 in 2020, official figures revealed.

House prices increased by 8.5 per cent in 2020, reaching a record high of £252,000, aided by lockdown buyers looking for bigger homes and the stamp duty holiday launched in July. 

The annual level of growth was the highest Britain has seen since October 2014, according to new data published by the Office for National Statistics, but the market is now predicted to cool off unless an extension to the stamp duty holiday due to end next month is announced.

This four-bed home in East Sheen, London is on the market with Savills for £7million

This four-bed home in East Sheen, London is on the market with Savills for £7million

In St John's Wood, this one-bed mews is being marketed by Savills for £1.025million. It was the location used as a hideout by the getaway driver for the Great Train Robbery gang in 1963

In St John’s Wood, this one-bed mews is being marketed by Savills for £1.025million. It was the location used as a hideout by the getaway driver for the Great Train Robbery gang in 1963

This six-bed family home with land and stables is located in Minchinhampton, Gloucestershire. It is listed on Rightmove with an asking price of £1.495million

This six-bed family home with land and stables is located in Minchinhampton, Gloucestershire. It is listed on Rightmove with an asking price of £1.495million

The ONS index is based on sold prices from the Land Registry and although it is adjusted to take into account for different types of homes being sold, it said shifting tastes may be contributing to the property market mini-boom.

Estate agents report strong demand for detached and larger homes, with big gardens or plenty of outside space, in or on the edge of the countryside. Meanwhile, previously popular factors, such as being walking distance to a station, or having a short commute have moved down the pecking order. 

House prices have seen a significant spike in the past year as the pandemic encouraged moves

House prices have seen a significant spike in the past year as the pandemic encouraged moves

The Land Registry said price increases were due to ‘a range of factors including pent-up demand, some possible changes in housing preferences since the pandemic and a response to the changes made to property transaction taxes across the nations’. 

Nick Leeming, chairman of estate agent Jackson-Stops, said: ‘Detached properties continued to be favoured by lockdown buyers, who after too much time spent indoors, accelerated plans to leave suburban city dwellings in search for larger homes with more space for a home office and a private garden. 

‘As a result, more rural locations over an hour from the UK’s major employment hubs continue to outperform the rest of the UK – with Richmondshire, the Derbyshire Dales and Winchester topping the charts for price growth. 

‘This reflects a growing trend of would-be commuters moving further out to get more bang for their buck.’

House price inflation accelerated in December compared to November, when year-on-year growth was 7.1 per cent. 

This two-bed cottage in Chipping Campden, Gloucestershire, is on Rightmove for £499,950

This two-bed cottage in Chipping Campden, Gloucestershire, is on Rightmove for £499,950

You could pick up this modern five-bed, three bath home in Chorleywood, near Rickmansworth, Hertfordshire, for £1.95million. It is also listed on Rightmove

You could pick up this modern five-bed, three bath home in Chorleywood, near Rickmansworth, Hertfordshire, for £1.95million. It is also listed on Rightmove

On a seasonally adjusted basis, average house prices in the UK increased by 1.3 per cent between November and December 2020, following an increase of 1.2 per cent in the previous month.   

Average house prices increased over the year in England to £269,000 (8.5 per cent), in Wales to £184,000 (10.7 per cent), in Scotland to £163,000 (8.4 per cent) and in Northern Ireland to £148,000 (5.3 per cent).

At least an element of stamp duty land tax has been suspended across all four nations.

Dinton Castle in Buckinghamshire has been converted into a two-bed home and is listed on Rightmove for £700,000. Built in 1769 by Sir John Vanhattem, it has featured on Grand Designs

Dinton Castle in Buckinghamshire has been converted into a two-bed home and is listed on Rightmove for £700,000. Built in 1769 by Sir John Vanhattem, it has featured on Grand Designs

Booth House in Pembrokeshire has three bedrooms and is available with Savills for £825,000

Booth House in Pembrokeshire has three bedrooms and is available with Savills for £825,000

In England and Northern Ireland, the portion of a property purchase up to the value of £500,000 would incur no tax, meaning a maximum saving of £15,000, while the thresholds for Scotland and Wales’s tax breaks are £250,000. 

The tax holiday is due to end on 31 March 2021 across the whole of the UK, although there have been rumours that chancellor Rishi Sunak could extend it by six weeks. Rightmove said this would save home buyers an additional £1bn.

Growth greatest in the North West 

The North West was the English region that saw the highest annual growth in average house prices (11.2 per cent), while London saw the lowest (3.5 per cent).

London’s average house prices remain the most expensive of any region in the UK at an average of £496,000 in December 2020.

Despite more subdued price growth, London estate agent Chestertons has said it conducted 44 per cent more viewings, agreed 33 per cent more sales transactions and brought 98 per cent more new properties to the market in December 2020 than in December 2019.

House price growth in London has stormed ahead of other regions in the last decade

House price growth in London has stormed ahead of other regions in the last decade

Nick Barnes, head of research, said: ‘In contrast to the usual seasonal slowdown towards the end of the year, we were still seeing a very active sales market. 

‘Buyer demand continued to be fuelled by the stamp duty holiday and the desire to move to a larger property that provides a dedicated area for home working.

‘Following a record December, the sales market has maintained momentum throughout January 2021. 

‘We have agreed 20 per cent more sales, largely driven by house hunters rushing to meet the stamp duty holiday deadline.’

The North East continued to have the lowest average house price, at £141,000, and is the final English region to surpass its pre-economic downturn peak of July 2007.

It has been rumoured that chancellor, Rishi Sunak, may extend the stamp duty holiday

It has been rumoured that chancellor, Rishi Sunak, may extend the stamp duty holiday 

Despite the record price high reached in December the market is now predicted to start cooling off, as it is unlikely that buyers agreeing sales now will meet the stamp duty holiday deadline. 

The average price of a home dropped by 0.3 per cent to £251,968 in January, according to the latest Halifax house price index. The ONS data lags a month behind.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: ‘Although these comprehensive figures show prices still rising, they are a little dated as they reflect a period when the possibility of taking advantage of the stamp duty holiday was much greater than it is now, and lockdown restrictions were not as intense.

‘Since then, the market has come off the boil as the possibility of profiting from that tax holiday recedes and the reality of juggling home schooling and further restrictions begins to bite.’

If the stamp duty holiday was extended, this could delay the slowing of house price growth, however. 

 Adnan Shah, founder of ethical real estate investment manager Buraq London, said: ‘Much of the slowdown in January had been due to buyers’ fears over the stamp duty holiday ending, but the growing optimism about an extension should see house prices blossom through the spring.’ 

Asked by This is Money whether it was considering extending the stamp duty holiday deadline, a Treasury spokesperson said yesterday: ‘The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity.

‘Its time limited nature is what has encouraged people to take advantage of the scheme.’

The average UK property asking price increased in January after three months of falls

The average UK property asking price increased in January after three months of falls 

Prices not predicted to fall off a cliff 

However, while prices are unlikely to continue to grow at the monumental levels seen in 2020 once the stamp duty holiday does end, there may not be a dramatic fall.

Nicky Stevenson, managing director at national estate agent group Fine & Country, said: ‘Markets don’t move in straight lines and there’s no doubt there will be fresh challenges this year, but there’s still too much pessimism around.

‘One aspect being routinely ignored is the amount that Britons have saved during the past 12 months and the effect that will have in the real economy.

‘The Bank of England’s Andy Haldane revealed this month that he expects “accidental savings” to have reached £250billion by June. 

‘This won’t just make itself felt on the high street and in our travel agents. It is set to be an instrumental supporting factor for house prices this year.’

In a further indication of the unpredictable nature of the current housing market, average asking prices have increased in the past four weeks after three consecutive months of falls, according to property website Rightmove.

According to its latest figures, the average asking price swelled by £1,522, or 0.5 per cent, to £318,580 in the past month.

No double-dip… but what next? 

The double dip recession is off… for now. The GDP figures are in for the final three months of 2020 and the UK economy grew by 1 per cent, according to the ONS, despite widespread expectations that it would shrink again.

This means that even if the latest – and hopefully last – lockdown shrinks the economy in the first quarter of 2021 then we will avoid the dreaded double-dip – as you need two consecutive quarters of negative growth (forgive the economics speak) for a recession.

Why didn’t GDP fall in the final stretch of last year, is there any way we could we claw our way to growth in the first chunk of this year, and how bad was the coronavirus year of 2020 for the UK? 

On this week’s, Georgie Frost, George Nixon and Simon Lambert dive into the GDP numbers to take a look at what this all means. 

 Press play above or listen (and please subscribe if you like the podcast) at Apple Podcasts, Acast, Spotify and Audioboom or visit our This is Money Podcast page  

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Experience of pandemic in Dublin and London worlds apart

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I have spent almost the entirety of the pandemic in London. And though the vertiginous changes in Irish and UK Covid policy over the past 18 months are easy to track through the news, a recent trip back to Dublin offered a fresh perspective.

The atmosphere on the streets is markedly different. And the day-to-day experience of life amid a pandemic worlds apart.

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The rent race! Return to office means tenants are fighting for homes

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Roseanna Lane has found it almost impossible get a two-bedroom property in her price range

Roseanna Lane has found it almost impossible get a two-bedroom property in her price range

Roseanna Lane thought she had plenty of time to find a new flat to rent when she gave notice to her landlord two months ago. 

But despite registering with eight estate agents in Richmond, South-West London, Roseanna and her partner Nick have found it almost impossible to nail down a two-bedroom property in their price range.

Even after raising their budget from £1,500 to £2,000 a month and considering properties farther afield, the couple, both 24, were repeatedly outbid by tenants willing to pay more. 

And they are not alone. Experts warn that the rental market is in chaos following a spike in demand after lockdown — particularly in big cities where workers are returning to the office, and student towns now that universities have reopened.

Agents say properties are being snatched up in as little as 24 hours — in which time applicants are registered, vetted, shown the flat and have their paperwork processed — before tenants move in a few days later. 

Renters also complain of being gazumped by others offering more money at the last minute.

Nervous landlords are desperate for financial security after the Covid-crisis ban on evictions, which only ended in May. 

As a result, many are increasing rents, carrying out stricter income checks and demanding that tenants commit to longer contracts. 

So even those who manage to find somewhere to live now face paying hundreds of pounds more per month, forking out a year’s rent upfront and locking into three-year tenancies for a property that likely doesn’t tick all their boxes.

Supply has also been hit by reforms to the buy-to-let sector, which has left landlords struggling to make a profit after losing lucrative tax breaks. 

Many have sold up to take advantage of the stamp duty holiday and rising house prices. Others have converted their properties to holiday lets.

Picky landlords and huge fee hikes 

Roseanna, who works in technology PR, says: ‘We’d look at a property that was not quite right but before we could make an offer, it was gone. We were refreshing websites such as Rightmove constantly.

‘Some of the prices were ridiculous — I found it sickening. Before lockdown, I was renting a two-bed flat in Richmond with a friend for £1,500 a month, but we were seeing some for as much as £2,250 a month that were just not worth the money.’

The couple were warned about a shortage of properties but thought the agents were just trying to get them to move quickly. 

They were also told that landlords wanted more security and were becoming far fussier about tenants.

Hot property: Agents say properties are being snatched up in as little as 24 hours -  in which time applicants are registered, vetted, shown the flat and have their paperwork processed

Hot property: Agents say properties are being snatched up in as little as 24 hours –  in which time applicants are registered, vetted, shown the flat and have their paperwork processed

Roseanna says: ‘We made sure to emphasise that we are a tidy, professional couple with stable jobs.’

She also found that landlords were unwilling to negotiate on rent. For one flat, the couple offered £1,800 — £100 below the asking price — and it was rejected straight away.

The pair later learnt that the person who secured the tenancy offered more than the price advertised.

They eventually settled on a two-bed flat outside Richmond because they were running out of time. They offered £1,600 a month — £25 more than what was asked.

They had to pay a holding deposit of a week’s rent to secure the property and agree to a three-year contract with a one-year break clause.

Pounce first thing or there’s no hope 

Ida Amegbey, who works for an investment platform, is struggling to find somewhere to live in Bristol.

She says the first hurdle is price. Over the past few years she has seen rent soar. Before the pandemic, a room in a shared house cost between £300 and £500 a month. Now, the starting price is £500. Meanwhile, the cost of a one-bed flat has risen from £600 to about £900.

And with a small pool of eligible properties, securing a viewing, let alone the chance to put your name on a list, is difficult.

Ida, 30, says estate agents are no longer taking your details to let you know when something suitable crops up. 

‘You now need to check the various websites first thing in the morning when new accommodation is listed, accept the earliest available viewing, then hope that by the time you view the flat, someone else hasn’t been for a viewing and requested to take up the listing,’ she says.

‘It’s not a case of finding a place you can afford or you like, or making sure the people you’ll be living with are compatible. You just take what you can get. It is frantic and stressful.’ 

Ida says she has heard of people sleeping on friends’ couches because they haven’t found a place to live after hunting for months on end.

She adds that tenants are also so worried about the rental market, they are putting up with more unfair treatment by landlords.

‘People I know are less likely to contest unfair charges or report too many repairs,’ says Ida. 

‘We feel we are tiptoeing around our landlords. Ours put the rent up by £100 a month at the start of the pandemic when two of my housemates had been furloughed and elsewhere people were losing their jobs. We just paid it.’

Stuck in limbo with time running out 

Bethan Howe has been looking for a four-bed house in Bristol with three other young professionals since June, when their landlord told them he wanted to sell their flat. 

He gave them until the end of September to find something but they have had no luck.

Bethan Howe has been looking for a four-bed house in Bristol with three other young professionals since June

Bethan Howe has been looking for a four-bed house in Bristol with three other young professionals since June 

Bethan, 23, says: ‘There are so few houses available for sharers — and when one does appear, we hardly even get the chance to arrange a viewing before they are booked up or people put in an offer without seeing the house. 

‘Also, one of the people I’m trying to rent with is doing a PhD and although she is salaried, landlords often consider her a student and reject us on that basis.’

Their landlord has now given them until November to move out, but Bethan says she is still not confident they will find somewhere.

Another tenant, who wishes to remain anonymous, told Money Mail she is currently battling her landlord’s demand for an extra £150 a month for a new tenancy once her existing one ends.

The 29-year-old pays £800 a month for a one-bed flat in Manchester, but has been told this will rise to £950. She says: ‘The justification has simply been ‘the market’. It’s crazy this is happening just before Christmas.’

Some pay a year’s rent up front 

There were nearly half (46 per cent) as many homes available to rent across Britain in August compared with the same month last year, according to estate agents Hamptons. 

At the same time, the firm saw an 8 per cent increase in people looking to rent.

The average monthly rent on a new let increased by 7.4 per cent across the country, from £1,010 to £1,085. 

Tenants in the South West of England saw the biggest hikes, with the average rent rising by 13.9 per cent, from £868 to £989, while those in the South East faced rises of 12.8 per cent — £138 more a month.

Along with Wales, Scotland has seen the sharpest drop in rental properties in Britain. As a result, the average rent in Wales has risen by 12.9 per cent while in Scotland it has gone up by 10.8 per cent, according to HomeLet.

Trade body ARLA Propertymark, which represents lettings agents, says the number of tenants being hit by rent increases jumped significantly for the second month in a row in August, with 79 per cent of agents saying landlords were raising rents, compared with 71 per cent in July.

It also reported record high numbers of new prospective tenants, with 107 per branch.

The house-share site Spareroom currently has more ‘room wanted’ adverts than it has postings for rooms available. This is only the third time this has happened in the UK in the past six years (the last was in 2019).

Lucy Devine, lettings consultant at Hamptons in Haywards Heath, West Sussex, says 27 per cent of properties have gone for over the asking price in the past year.

This means an extra £194 a month for landlords, on average.

Tenants hoping to make themselves more appealing to landlords have been offering as much as six months’ rent upfront.

Ms Devine says: ‘I had to block out a whole day for viewings of a four-bed home because the interest poured in. We usually spread viewings over a few weeks.

‘That day we had six offers, with tenants offering above the asking price, longer tenancy agreements and advance rent.’

Tenants who earn average salaries spend almost a quarter of their income on rent, according to the Office for National Statistics — in hotspot London you would have to spend 37.7 per cent of a typical income on rent.

Adam Stone, lettings manager at Winkworth’s Clerkenwell and City office, says: ‘We have been getting dozens of enquiries for all our properties and generally receive up to five or six offers, some well over the asking price.’

Joseph Cooper, from The Keel, a development of 240 apartments in Liverpool, says flats are being snapped up unviewed within an hour of being listed online.

Enquiries were up 1,650 per cent last month compared with the year before, he adds, as young people returned to the city after moving in with their parents during lockdown.

Amelia Greene, director in the prime lettings team at Savills, says the return of international travel, combined with full easing of lockdown restrictions, has sent the market into a frenzy.

She adds: ‘Demand is up across the board, but hotspots in North and East London have been particularly popular. 

In some instances, tenants are ensuring that they are the most appealing candidate by paying for a full year upfront, or by committing to properties unseen.’

Sarah Coles, from investment firm Hargreaves Lansdown, says: ‘Generation rent has been hit hard during the crisis. They were more likely to have borrowed money to make ends meet, and those already in debt were more likely to have borrowed more.

‘The pandemic pushed the finances of many of them to breaking point, so a hike in rental costs is the last thing they need.’

a.murray@dailymail.co.uk

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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State’s population breaks five-millon mark for first time since Famine era

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Ireland’s population has broken the five-million barrier, while the level of smoking among the Irish has fallen to just 9 per cent.

Those are just two of the diverse facts published this morning by the CSO as part of the Ireland Yearbook 2021.

Publication of the yearbook, an annual snapshot of life in Ireland based on statistics compiled by the CSO, this year begins today with chapters on people and society.

It will continue on Thursday with chapters on business and the economy and will be followed on Friday with the chapters on tourism, agriculture, the environment and Covid-19.

According to the CSO Yearbook 2021, Ireland’s population breached the five million mark for the first time since the 1851 census. The population was estimated to be 5.01 million in April 2021, while the comparable population in 1851 was 5.11 million.

The increase in Ireland’s population was estimated to be 34,000 in the year to April 2021, the smallest increase since 2014 . Intuitively, this may have been due to Covid -19 restricting the movements of international workers, but students of this demographic may have to wait until Friday to fine out definitively.

In terms of regional breakdown Dublin’s population increased by 8,300 in the year to April 2021, bringing the population of the capital to almost 1.43 million, amounting to 28.5 per cent of the State total.

The Midlands, with just over 307,000 people (6.1 per cent), was the region with the smallest population in April 2021.

Smoking is more prevalent in the non-Irish national community than for Irish nationals, the CSO said. Some 17 per cent of non-Irish nationals reported daily smoking compared to just 9 per cent of Irish nationals.

Alcohol consumption and smoking was highest in the 25-34 age group (87per cent of this age group drank alcohol, and 14per cent reported they smoke daily), while the age group 75 years and over reported the lowest levels of alcohol consumption (56 per cent ) and smoking (4 per cent daily).

In other areas of Irish life:

* There were 1,101 breaches of Covid-19 regulations that were classified as crime incidents by An Garda Síochána in 2020, and these included breaches of regulations relating to domestic travel restrictions, licensed premises, wearing of face coverings and international travel.

* Rural households were more likely to report having some or great difficulty accessing a bank (44.2 per cent ) or post office (33.1 per cent) in 2019, compared with urban households at almost 17 per cent and almost 9 per cent, respectively.

*Of those young people who moved back with both parents since the onset of the Covid-19 pandemic, 22 per cent said their relationship with their father has improved. Some 31 per cent said their relationship with their mother had improved.

“When it comes to life events, births to teenage mothers continues to decrease with 830 births to women under 20 recorded in 2020, compared to 1,199 in 2015.

*Grace pipped Fiadh to the most popular baby name spot for girls. Jack retained the top spot as the most popular boy’s name, while the top three surnames for babies were Murphy at 602 (1.1per cent), Kelly at 523 (0.9 per cent ) and O’Brien at 467 (0.8 per cent).

“Marriage rates more than halved in 2020 most likely as a result of the pandemic. December proved the most popular month for opposite-sex couples to tie the knot as restrictions eased. February was the most popular month for same-sex couples.

The yearbook noted that in 2019 CSO surveys found the South-West reports the highest levels of some form of depression (mild to severe) at 18per cent of people aged 15 years and over. The West region reports the lowest levels of some form of depression at 10per cent.

The pandemic also had an impact on crime, as the total number of recorded crimes in 2020 fell sharply in the categories of burglary and related offences (down by 5,810, or 34.7per cent ) and theft and related offences (down by 16,684, or 24.5per cent ).

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