House prices expected to fall sharply in April 2021.
16 February 2021
By Jeremy Greer
Our House Price Forecast predicts that after a steady decline in January and February, UK house prices will fall more sharply as April begins.
According to the reallymoving House Price Forecast, April 2021 will herald a sharp decrease in house prices after the Stamp Duty holiday comes to an end.
House prices fell by a relatively small 1.2% between December and January, following the record high for house prices at the end of 2020. House prices are then likely to steadily fall by 2.5% and then a further 2.6% into February and March. Prices will then hit their first major cliff edge of 2021 in April with a predicted drop of 4.1% from March.
The reason for the steady decrease in house prices at the beginning of the year is likely due to the Stamp Duty holiday coming to an end in April. Fewer and fewer people felt confident that they would complete their purchase before the holiday ends, and therefore fewer people were buying property. This all comes to a head in April where there is no longer the possibility of avoiding Stamp Duty Tax, explaining the sudden drop in house prices.
However, though the numbers are dropping, they are in fact reverting to a similar position as in spring 2020, before the Stamp Duty holiday began. This means that there is little cause for concern with these numbers, as it heralds a return to normality for the housing market.
Regionally, every area of the UK will see a decrease in house prices from January to April 2021. The area that is predicted the biggest decrease is Northern Ireland, which will see an average house price drop of 24.6% in these 3 months. The area that is predicted the smallest decrease is the North East of England, which will see an average house price drop of just 1.7% in these 3 months.
You can see more information in our January 2021 Forecast.
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SD on 02/07/2021