The number of properties sold this year is set to reach the highest level since the global financial crisis, Zoopla has forecast.
Its projections come as the website’s latest house price index shows asking prices increased by 4.1% in the year to April, to reach an average of £228,300.
Home sales are on track to hit 1.52m this year, an increase of 45% from 1.05m in 2020, the property portal predicts.
It says that with average annual transactions rarely exceeding 1.2m per year over the last decade, this would mark the highest number of sales since 2007 and make 2021 one of the top 10 busiest years since 1959.
In the run-up to the credit crunch and housing market crash, transactions hit a peak of 1.67m in 2006 and 1.61m in 2007.
Zoopla predicts that the total value of sales will reach £461bn this year, which would be an increase of 46% compared to 2020 and a jump of 68% compared to 2019.
Despite the market being set to break these records, transactions are being held back by lack of supply, with the number of homes available to buy down by 21% in the year to mid-May compared to the previous 12 months.
Demand for family houses appears to be driving growth with prices up by 5.2% year on year, compared to 1.1.% for flats.
Zoopla says the hottest regional markets include Wales, Yorkshire & Humber and the North West, where property is selling 10 days faster than in 2017-2019 and prices are growing most strongly.
At a city level, Liverpool and Manchester are registering the highest levels of annual growth for the fifth month in a row at 6.9% and 6.8% respectively.
Meanwhile, house prices in inner London are up just 0.3% on the year, with price falls in the City of London, Kensington & Chelsea, the City of Westminster and Hammersmith & Fulham.
Zoopla head of research Grainne Gilmore says: “Demand levels have moderated since the peak in Q1 as the economy opens up and life starts to return to some sort of ‘normal’.
“The easing of lockdowns will continue to cause a natural fall in demand as people are able to see family and enjoy amenities that have been shut for more than a year, but new buyer demand will still emerge throughout H2 as office-based workplaces confirm if they will be pursuing more flexible working practices.
“Households who have the opportunity to commute less frequently have more options when it comes to choosing where to live, and this could prompt a move.
“Likewise, older households will continue to review how and where they are living, with many more set to move for the first time in years.
“With an increased array of mortgages to choose from, first-time buyers will also remain active in the market.
“At the same time, supply constraints will continue to underpin pricing. The lack of supply is expected to hamper potential sales during this year, yet even so, we expect total transactions this year to rise to 1.5 million, marking one of the busiest years in the UK’s residential market in more than a decade.”
Hometrack managing director David Ross says: “The mortgage market is running in parallel and our data shows it has reached one of its strongest borrowing periods on record; this was confirmed by the Bank of England’s March figures, which illustrated that borrowing is at its most buoyant since 1993.
“Increased activity amongst higher equity borrowers – for example those driven by increased demand for larger, family homes – has led to increased demand for larger mortgages often at lower loan-to-value, offsetting risk and mitigating against the potential ramifications of extended debt.
“As we approach the end of the stamp duty holiday, the combined impact of the security brought about by the Mortgage Guarantee Scheme and the relaxation of rules around Covid are painting a positive outlook for the rest of the year.
“Mortgage lenders are set to experience continued demand throughout the remainder of the year, with momentum from 2021 likely to spill over into 2022.”
Shawbrook Bank managing director of property finance John Eastgate says: “The pandemic has pushed London to the bottom of the house price inflation league, but as we face into what seems to be a solid recovery, there can be little doubt that it will soon be gaining places and rising up the table.
“If we look to the medium and longer term, our city centres will recover and thrive as workers return.
“With solid fundamentals underpinning the property market even after the end of the stamp duty holiday, there’s a strong argument to suggest that our cities, London in particular, represent good value today for both homeowners and investors.”
