What is the average house price in the UK in 2021?

2020 presented unprecedented challenges for individuals, businesses and investors. Despite uncertainty from the ongoing coronavirus pandemic, the property market appears to be recovering.

In November 2020, residential property prices experienced the highest levels of growth in four years, with an increase of around 6.9%. While growth dropped to 6.4% in January 2021 - as can be expected after the post-Holiday spends - the property market throughout the year has witnessed growth of 0.7% each month, more than making up for January’s slight shortfall. By March 2021, average house prices had reached £256,400.

However, the questions remain: can the property market in the UK continue to maintain this level of momentum? Will property investors be able to look forward to another year of gains? And crucially, could unforeseen developments negatively impact the property market, thereby reversing the price increases enjoyed over the past year?

Average house price 2021: will house prices drop in 2021 UK?

If you are intending on buying or selling a property, it’s important to understand what could affect house prices and whether now is the right time to make a move. It’s also worth remembering that if house prices drop, it’s not all bad news. Whether you’re a seasoned property investor or a first-time buyer, house price adjustments can be beneficial. A drop in the price of housing in an area you wish to purchase in could allow you to secure a property at an affordable price while allowing you to have more capital at your disposal for your next purchase.

On the contrary, if house prices continue to increase as predicted, existing property owners should be able to use their assets for greater collateral.

What will happen to house prices in 2021?

Recent trends suggest there is positive momentum in the property market. The North West is predicted to enjoy the greatest gains (approximately 22%) with prices in the UK overall averaging a 15% increase. London is predicted to benefit least, with house price growth in the capital touted at 5% by 2024.

One of the main factors driving the increase in housing prices is the undersupply within the residential rental market. While this might pose a challenge for renters, it represents a golden opportunity for property investors - particularly across regional areas like the North, where markets are incredibly competitive while still remaining affordable.

The buy-to-let market in the UK is currently worth over £1 trillion, and this is estimated to continue to grow over the next two decades. Research suggests that renters will begin to outnumber homeowners by 2040. The convenience and flexibility of renting and increasing house prices are the two primary factors driving this market.

The continued regeneration of various regional areas throughout the UK has boosted the rental market. A competitive market means that developers are increasingly concentrating on delivering quality over quantity, and the knock-on effect is that rental prices are steadily increasing.

While growth may be slowing down in London, there are still ample opportunities for property investors in areas like Manchester, Leeds and Birmingham to enjoy fruitful returns on investment. Over the past decade, developments in connectivity (such as the forthcoming HS2 railway project) mean that increasing numbers of people are choosing to live and work outside the confines of England’s capital.

Is 2021 a good year to buy a house?

Whether you’re considering buying a home or buy-to-let investment, 2021 could be a good year to consider purchasing a property. The stamp duty holiday currently allows purchasers to save up to £15,000 in stamp duty tax on property transactions and is set to run until September 30, 2021.

For those looking to buy-to-let, living trends in 2021 continue to point to an increased demand for rental properties the millennial "generation rent" should provide an appealing long-term customer base for investors looking to create a property portfolio.

According to research, approximately 40% of millennials are still renting over the age of 30. It is predicted that a third of the wider population is likely to continue renting well into retirement age.

While some critics might consider lifetime rental as a bad thing, it’s worth pointing out that this model is widely accepted across Europe. In Germany, for example, just over 40% of people own their own property. With the demand in the rental sector continuing to increase, experts predict that EU-style property rental agreements will be introduced, which provide increased security and flexibility for both tenant and landlord alike.

Another reason to consider purchasing a house in 2021 is that interest rates are at a historic low of just 0.1%. As a result, lenders are more likely to offer competitive buy-to-let mortgages and other financial products which make the investment process much more accessible, particularly for first-time buyers.

For experienced property portfolio investors, the low-interest rate also has the additional benefit of allowing homeowners to remortgage existing properties to release equity. This allows them to leverage new investments with ease.

Is it a bad time to buy a house UK?

The uncertainty surrounding many businesses and industries across the UK has left many people wondering about the long-term ramifications on employment and earnings. In this context, it is understandable why some might consider 2021 to be a bad time to purchase a house in the UK.

However, despite the challenges of Brexit and Covid-19, property has continued to be one of the UK's most stable asset classes.

Take the original lockdown, for example: when Boris Johnson first announced the closure of all non-essential businesses back in March 2020, the UK stock market plummeted by approximately one-third, while the property market continued to remain relatively strong.

One of the unexpected side effects of the pandemic is that many people have begun to re-evaluate their current living situations. With the rollout of various different vaccines helping to get the country moving again, many people are now putting into practice decisions made over the past year to either move out of their family homes or upgrade to a larger property with a garden. This demand has driven both the home-ownership and rental sectors to grow. In 2021, demand for rental properties has increased by over 20%, with properties being let up to one-third faster than they were at the beginning of 2020.

The emergence of a growing culture of working from home - which looks set to stay post-pandemic - has created a demand for larger, higher-quality rental properties. People are increasingly looking for properties with extra rooms which can be utilised as home offices, and this increased demand for larger properties can in turn provide greater rental yields.

Ultimately, personal circumstances will dictate whether now is a bad time or a good time to invest in property in the UK. For those facing employment uncertainty, holding off on committing to a mortgage may seem like the most sensible option. For those with the capital, such as existing property portfolio holders, there’s never been a better time to invest in UK property.

Improve your property portfolio investments today

With the property market showing promising signs of growth over the next four years, there’s never been a better time to either begin a property portfolio or improve upon your existing one.

With easy-to-follow tutorials from PropertyData, you’ll find a wealth of resources designed to help you make more informed investment decisions.

It’s simple to access opportunities to learn about specific investment strategies and how to evaluate properties, with accurate high-resolution plot maps, up-to-date valuations and more. Why not give your investment technique an overhaul the quick and easy way today?

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Transparent data promise

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

Averages shown are the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How do you know the square footage of properties?

We use proprietary technology to read the square footage of properties from agent floorplans. Although we cannot determine the square footage for all properties, we can usually get sufficient coverage. Agents are sometimes known to inflate square footage, and this should be borne in mind as a weakness of this data.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property "price paid" data provided by the Land Registry.

How often is the data updated?

Once per month when released by the Land Registry, typically towards the end of each calendar month covering up to the end of the previous calendar month.

What time period does the data cover?

You can customise the time period using the filter at the top of the view. The default time period is up to 9 months back from today's date. The latest data covers the period up to 2022-05-31, although some sales that took place before this date may still be added in the coming months.

How is the raw data processed?

No additional processes are applied to this data.

What are the statistics used?

Averages shown are the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property "price paid" data provided by the Land Registry, and Energy Performance Certificate (EPC) data provided by Ministry of Housing, Communities & Local Government.

How do you know the square footage of properties?

We match the Land Registry data to EPC data provided by the MCHLG. Due to the fact that not all properties sold have had an EPC and vagaries of addressing in the UK, we are not able to determine the square footage of all properties, but we can usually get sufficient coverage.

How often is the data updated?

The private paid data is updated once per month when released by the Land Registry, typically towards the end of each calendar month covering up to the end of the previous calendar month. The energy performance certificate database is updated monthly.

What time period does the data cover?

You can customise the time period using the filter at the top of the view. The default time period is up to 9 months back from today's date. The latest data covers the period up to 2022-05-31, although some sales that took place before this date may still be added in the coming months.

How is the raw data processed?

No additional processes are applied to this data.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Room let listings on SpareRoom, the UK's biggest room letting website.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from SpareRoom, they are soon removed from this tab.

How is the raw data processed?

Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded. Yields are calculated by comparing only properties with the same number of bedrooms, e.g. 3-bedroom properties for rent with 3-bedroom properties for sale.

What is the yield calculation used?

The calculation used is (average_weekly_asking_rent * 52 / average_asking_price), expressed as a percentage. It is a top-line gross yield, meaning no expenses are considered.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from Zoopla, Rightmove or Spareroom, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Yields are calculated by comparing only properties with the same number of bedrooms, e.g. 3-bedroom properties for rent with 3-bedroom properties for sale. For the SpareRoom data, hypothetical properties consisting of two to six average double rooms with shared bathrooms are used to derived average rent. For all sources, listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What is the yield calculation used?

The calculation used is (average_weekly_asking_rent * 52 / average_asking_price), expressed as a percentage. It is a top-line gross yield, meaning no expenses are considered.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property "price paid" data provided by the Land Registry.

How often is the data updated?

Once per month when released by the Land Registry, typically towards the end of each calendar month covering up to the end of the previous calendar month.

Zoopla Zed-index

What time period does the data cover?

The data covers transactions in the last six years

How is the raw data processed?

No additional processes are applied to this data.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The listings data is updated in near real-time. The Land Registry data is updated once per month when released, typically towards the end of each calendar month covering up to the end of the previous calendar month.

What time period does the data cover?

The price paid data shown goes back to January 2015. The listings data is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the calculations used?

Average sales per month are for the last 3 finalised months. Turnover is average sales per month divided by total for sale. Inventory is 100 divided by turnover.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The listings data is updated in near real-time. The Land Registry data is updated once per month when released, typically towards the end of each calendar month covering up to the end of the previous calendar month.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

Where does the raw data come from?

We receive data on the extent and corporate ownership of all land titles in England & Wales from the Land Registry.

How often is the data updated?

The data is updated once per month when released, typically in the first few days of each calendar month.

What time period does the data cover?

This is an ownership snapshot - the data represents ownership as recorded by the Land Registry at the last monthly export.

How is the raw data processed?

No additional processes are applied to this data.

Where does the raw data come from?

We source different expert forecasts Savills, Knight Frank, OBR

How often is the data updated?

The data is updated annually when new forecasts are released, typically towards the beginning of the year.

How is the raw data processed?

We calculate a consensus forecast using a simple mean average.