As we enter the spring market, many buyers and sellers may be wondering what's ahead for the prime UK property market in 2021 and beyond. Our recent webinar shared our latest insights into consumer confidence, the impact of the March Budget and our upgraded house price growth forecasts. Here is a brief summary of some of the key questions asked and answered by our experts.

Have the latest national lockdowns and the vaccination programme impacted people's plans to move home?

In our recent buyer and seller survey, 63 per cent of respondents said the latest national lockdown had affected their plans to move. However, of those, only 15 per cent said they now felt less committed to moving – the rest said they were as, or more, committed than before, but that some had delayed their plans. Similarly, the progress of the vaccination rollout has strengthened the resolve to move both in the short and medium term.

This suggests that demand is likely to remain strong throughout 2021 and into next year, and consumer confidence and motivation will further increase once social distancing measures ease. You can read more about the results of the survey and changing priorities here.

Will we still see a mid-year lull in housing market activity?

We anticipated that 2021 would be a year of three parts for the UK housing market, with strong growth at the start of the year and economic recovery at its end, though with a potential mid-year lull as the stamp duty holiday ended and unemployment reached a peak.

Following extensions to the stamp duty holiday and furlough scheme, we anticipate that activity levels will continue to be supported. The speed of the vaccination programme and the roadmap for easing lockdown restrictions have also boosted consumer confidence, reducing the risk of a hiatus.

What can we expect for house price growth in 2021 and beyond?

In the mainstream market, we forecast that house prices will grow by an average of 4.0 per cent in 2021, underpinned by government support, the easing of social distancing restrictions, and low interest rates. In the long term, several questions hang over the market that will determine levels of activity and future price growth, including what impact the vaccination programme will have on buyer sentiment. However, based on our current economic assumptions, our forecasts envisage house prices will grow by 21.1 per cent over the next five years.

For prime residential, which typically comprises properties in the top 5 per cent of the market, we forecast that house prices will grow by 2.5 per cent in London and by 5.0 per cent in the regional markets in 2021 and by 18.1 per cent and 20.5 per cent over the next five years respectively.

• Watch Moving forward: What's ahead for the prime UK housing market? for more insight from our panel of experts.
  
  
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Further information

Contact Justin Marking or Frances Clacy

Contact Savills Research