House prices jump 10.9% as 'race for space' sees highest prices in seven years
The 'race for space' is on
Though the 'race for space' may seem like a reality show where contestants compete in a capture-the-flag style ordeal, the reality is something much closer to home. Last year, amidst the humdrum of the pandemic, the government introduced a tax break for potential buyers in England and Northern Ireland. Said tax break is soon coming to an end and with it an increase in house prices.
Homeowners could have saved up to £15,000 in tax if they moved before the deadline. Thousands of UK residents have been taking advantage of this, with many buying their first homes, some even moving locations entirely. The deadline, having initially been March, has since been extended to the end of June.
Data from HM Revenue and Customs (HMRC) illustrates just how rushed the housing market has become over the past year. The data shows that 19,980 sales cleared in March 2021, almost double the number recorded in 2020.
But over the past year, housing prices have risen by an average of £23,930 - the highest they have been in seven years. Though the tax break has undeniably aided in the surge of house purchasing, Robert Gardner, Nationwide's Chief economist, suggests that this could be due to people looking to move to 'less urban areas,' according to the BBC.
Unsurprisingly, the areas most affected by rising house prices are the same locations most Brits' tend to flock to on summer holidays. Like St Mawes in the southwest, towns with a seaside view have seen a surge in prices of around 48%. The average price of properties on the coast is now £265,978, with hotspots in Cornwall and Devon being the most widely sought after.
Though the demand for housing across the entire country has increased astronomically, the supply cannot keep up. "The market is experiencing a growing imbalance of supply and demand, and we see no indication that supply levels will increase," says Mark Hayward from Propertymark.
The tax cut is due to finish at the end of June, so the push for housing will undoubtedly become more frantic. Despite 'Race for Space' seeming rather frivolous by name, the harsh reality for potential homeowners is a daunting one.