Demand increase for outdoor space in house purchases

Global house prices have risen at their quickest pace in almost 15 years.

 

According to Knight Frank, average prices rose by 7.3% in the year to March, their fastest increase since the dawn of the financial crisis in the fourth quarter of 2006. The price surge is thought to have been triggered by a scramble for bigger homes with more outdoor space after families were confined to their homes during lockdowns.

 

Turkey saw the biggest increase, with growth of 32% compared with the previous year, followed by New Zealand where prices increased by 22%. In fifth was the US with growth of 13.2%, while the UK increase of 10.2% put them in twelfth.

 

Knight Frank said that 12 countries recorded double-digit price growth and added: "It is no surprise that talk of post-pandemic housing bubbles is increasing, but authorities are already starting to take action. Since January 2021, authorities in China, New Zealand and Ireland have intervened with a range of measures from tighter lending rules to higher stamp duties for multiple purchases."

 

Not all countries are following the price hike trend, however. Researchers said prices remained sluggish in some places due to a combination of lockdowns, economic concerns and a supply glut. Italy recorded growth of only 1.6%, while in Spain and India while prices fell 1.8% and 1.6% respectively.

 

In the UK the housing market was insulated from the economic shock of Covid through emergency measures such as a stamp duty holiday, and the taxpayer-funded furlough scheme, and a wave of first-time buyers and cash-rich borrowers are expected to buy property in the coming months, triggering a fight for customers amongst lenders.

 

However, there are concerns that an echo of the last crisis is showing and that the market is overheating. In August 2007, before the financial crisis, prices hit peaks, but less than a year later there began a 17-month period of house price falls began, seeing values plummet by almost 16%.

 

the Bank of England's deputy governor, Sir Dave Ramsden, said that officials are keeping a close eye on the boom and its potential risks.

 

Mandy Peters Solicitors 

Lewisham