Britain’s housing market is booming but the structural issues still remain, says Tiger Craft. He is a Partner and CIO at Hilltop Credit Partners, a funding partner for small and mid-sized residential property developers and housebuilders across Britain.
Britain’s housing market continues to flip the recession script with average asking prices hitting record high in spite of the ongoing coronavirus restrictions and the economic uncertainties.
Tiger Craft, Partner and CIO at Hilltop Credit Partners, says the latest figures from Rightmove and Halifax reinforce that a mini housing boom is underway and that the government’s attempts to support demand through incentives like stamp duty holiday is helping this growing sentiment.
Tiger comments: “The latest Rightmove data shows that the average asking price of homes coming on to the market has hit a record high, with asking prices 5.5% higher than in October last year. Another report by Halifax restates that the average price of a home in the UK is now £249,870 — up by £17,000 between August and September in the fastest growth in more than four years.
“Restrictions on the UK property transactions were lifted in May, following an eight-week period during which the housing market was effectively shut. Once the restrictions began to ease, the housing market has witnessed a sharp rise.
“Even now when the country is facing its deepest recession on record, the house prices are at an all-time high. This contradiction can simply not be because the sector is immune from the COVID-induced paralysis. The answer to this is not in the virus but in the nature of the housing market itself.”
He continues: “In Britain, the fundamental challenges around housing stock still remain: the supply-demand imbalance across the country, and the large addressable market in funding. I strongly believe that people will always need and want homes, and no virus is going to change this reality.
“We also have to look at the support extended by the government and how recent announcements have been instrumental in supporting the sector throughout. Prime Minister’s landmark ‘Build, Build, Build’ speech where he spoke about how Britain suffers from a ‘chronic failure’ to build enough homes and the need to ‘level up’ with a focus on the regions.
“The speech not only provided a boost to SME developers and buyers but to potential first-time buyers as well, as the announcement was followed up by a stamp duty cut in July. The government’s focus is now on creating a ‘Generation Buy’ and to help would-be homeowners who are currently locked out of the property market due to steep demand for deposits. All these measures have meant that the housing market has been doing extremely well especially since the lockdown.”