Connect with us

Hi, what are you looking for?


House prices will drop in 2021 as Covid impact hits

Estate Agents Window

House prices in the UK are expected to fall by up to 5% next year, fuelled by rising unemployment and the end of the government’s stamp duty holiday.

Halifax, Britain’s biggest mortgage lender, said the economic fallout inflicted by the pandemic would catch up with the property market in 2021, after an unexpected boom during the coronavirus pandemic. It is forecasting a fall in house prices of between 2% and 5% for the year as a whole.

It said the impact of the Covid crisis on household finances had been delayed by supportive government policies such as the furlough scheme, but that the gradual scaling back of support next year, with the closure of the wage subsidy programme from the end of April, meant unemployment would rise. This in turn will pile pressure on the property market after sharp price rises in 2020.

Russell Galley, managing director at Halifax, said: “While the economy should begin to recover in 2021, helped by the roll-out of Covid vaccines, the jobs market will inevitably adjust to the changes in demand that are occurring, and unemployment is expected to rise. With the stamp duty holiday also due to expire in March – and lower levels of demand – housing market activity is likely to slow.”

The forecast for the housing market comes as Britain’s economy is under renewed pressure from a new strain in the virus, tougher lockdown controls for much of the country, and chaos at Britain’s borders with just days to go before the end of the Brexit transition.

Robert Jenrick, the housing secretary, has confirmed the sales and rental markets will remain open in tier 4 areas across London and the south-east of England. However, analysts increasingly warn that the economic fallout from the pandemic and scaling-back of government support next year will cause a short-term crash in house prices.

The Office for Budget Responsibility, the Treasury’s economics forecaster, expects that house prices will plunge by more than 8% next year before staging a rapid recovery in 2022.

The OBR also said there would be a boom in property transactions before the end of the stamp duty holiday in March, as prospective buyers rush to avoid the deadline. Sales volumes are then expected to fall sharply, exacerbated by rising unemployment after the end of the furlough scheme in April.

However, Halifax said declines of up to 5% would only partly erase average growth in house prices of £18,000, or 7.6%, over the past year. It also said that prices were still well out of reach for many first-time buyers, made worse by the economic fallout from Covid driving up inequality.

Galley added: “Despite the deepest recession for centuries, house prices have risen over the past year at their fastest rate since 2016, with mortgage approvals also at their highest level for over a decade. This growth has been driven by a shift in demand from buyers as a result of increased home working and a desire for more space, while the stamp-duty holiday brought forward many transactions that might otherwise have been planned for next year.”

Read more:
House prices will drop in 2021 as Covid impact hits

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



BERLIN — The founder of Russia’s only LGBTQ+ museum said he was forced to close its doors on Wednesday after President Vladimir Putin signed...


Philippine lawmakers are looking to tap central bank profits to seed a proposed sovereign wealth fund, after an earlier plan to use pension funds...


Presidential elections drove this year’s Google searches in the Philippines as “Halalan 2022” topped the overall list of trending searches and “precinct finder” landed...


THE UNEMPLOYMENT RATE eased to 4.5% in October, returning to the record-low level last seen in October 2019 before the coronavirus pandemic hit, the...


THE NATIONAL GOVERNMENT’S (NG) outstanding debt hit a record high of P13.64 trillion as of end-October, driven by more domestic and foreign borrowings, the...


MANUFACTURING rose for a fifth straight month in October, reflecting the continued reopening of the Philippine economy, analysts said. Preliminary results of the Philippine...

You May Also Like


The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...


Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.