Evidence suggests that the UK government’s efforts to stimulate the real estate market are paying off, with the latest figures indicating a surge of activity last month. Spurred at least partially by the extension of the stamp duty holiday, data from HM Revenue and Customs (HMRC) indicates that the highest volume of property transactions since 2005 took place in March.

This impressive and largely unexpected 16-year high suggests that the real estate market has not been affected by the COVID-19 crisis nearly as significantly as anticipated. While there have been major shifts in preferences and areas of interest across the UK, the number of people intent on moving is as high as ever.

The same can also be said for average UK house prices, which for the month of March were up approximately 8.6% on the year before.

A buoyant and boomy spring property market

According to the non-seasonally adjusted figures released by HMRC, exactly 180,690 UK home sales were completed last month. This represents an impressive 50% increase from February and more than twice the number of homes sold in March 2020.

Market watchers had anticipated a significant slowdown in activity during February as the public waited for news on a potential extension to the temporary stamp duty holiday. When the chancellor announced in the Budget on March 4 that stamp duty relief would be extended throughout the summer for most home purchases in England, Wales, and Northern Ireland, a wave of pent-up demand was subsequently released on the market.

In addition, the government also introduced an initiative to encourage high-street lenders to reintroduce 95% LTV mortgages, enabling buyers to qualify for mortgages with a deposit of just 5%. This subsequently proved instrumental in motivating many first-time buyers to take action, who had previously been priced out of the market with typical deposit requirements of 10% to 20%.

A temporary surge or sustainable growth?

Speaking on behalf of property lender MT Finance, commercial director Gareth Lewis questioned whether the market’s current strong performance could be maintained.

“What will be interesting to see is whether this growth is sustainable or simply a reaction to the stamp duty holiday. The next three months will give us a better indication of this,” he said.

“As much as this latest lockdown in particular has been hard, it is encouraging that people have not hunkered down and retreated but carried on with their plans to move.”

While movers and first-time buyers are being encouraged by the government to take action, concerns grow over rapidly escalating property prices in key regions across the country. Annual house price growth recently hit a six-year high, fuelled by the major spike in demand prompted by the government’s stimulus efforts.

According to the Office for National Statistics (ONS), the average asking price for a home in England was up 8.7% year-on-year in February to reach a new high of £268,000.

The United Kingdom has added its name to a growing list of countries looking to leverage the growing popularity of cryptocurrency. Chancellor Rishi Sunak made the announcement at a fintech industry conference, confirming that the UK government is considering the introduction of its own form of virtual currency.

“We’re launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency,” Mr. Sunak explained.

Meanwhile, further details were released by the Bank of England in a statement that confirmed that the proposed currency would be introduced as a “new form of digital money issued by the Bank of England and for use by households and businesses”, designed to coexist with conventional currency rather than replace it.

No formal decision has yet been made on whether a digital version of the GBP will be introduced, with the British government having simply confirmed its intent to investigate the “objectives, use cases, opportunities, and risks” attached to such an initiative.

The Bank of England has also confirmed the establishment of a new internal unit tasked with examining the possibility of introducing a central bank digital currency in the UK.

China hit the headlines last week after officially becoming the world’s first country to introduce its own form of virtual currency. The People’s Bank of China is said to have been working on the digital yuan project for some time, which is now set to be tested on a broad scale at the 2022 Beijing Winter Olympics.

Cryptocurrency’s explosive performance

The news comes less than a week after the world’s most iconic crypto coin surged to a new record high, spurred by a series of high-profile coin purchases and the upcoming debut of cryptocurrency exchange Coinbase.

Bitcoin, which was once trading at just $4, skyrocketed to an astonishing $64,829 last week before falling steeply to just over $56,000 over the course of the weekend due to concerns regarding regulation and the prohibition of its use by a number of national governments.

In the meantime, Doge Coin, a crypto coin originally inspired by a meme, likewise saw a major rally over the past couple of weeks. This has been interpreted by many analysts as further evidence of a bubble in the crypto market, which will inevitably burst at some point in the near future.

If introduced, central bank digital currencies would differ from decentralised crypto coins like Bitcoin, which are not regulated or controlled by any government or central bank. This is the main factor behind the extraordinary volatility of cryptocurrencies, which are known for swinging wildly in both directions with little to no predictability.

The extent and severity of the UK’s housing shortage were made painfully apparent this week when it took just 3 hours for an estate agent in Wales to sell 13 new homes. Dozens of people spent the night on the pavement outside the agency in Aberdare, hoping to secure one of the affordable properties set to go on sale the next morning.

A report from the BBC confirmed that around 30 people slept outside in near-freezing temperatures, some arriving more than 18 hours before the homes were put up for sale there. Despite the somewhat tragic nature of the situation and its reflection of the dire situation facing the housing market, those waiting in line spoke of a party atmosphere.

Some had brought prosecco, intent on toasting their subsequent homeownership in advance.

Unprecedented scenes

A representative from the estate agent said that they had never seen anything like it. The first prospective buyer in line, 32-year-old Hamilton Shaw, arrived in the middle of the afternoon the day before.

“Originally, we planned to go in line at midnight, but with more interest, the time got earlier and earlier,” she told the BBC.

“And it’s a good job we did as the next person came around four o’clock.”

“People were still coming in the early hours and then walking away once they asked those of us queuing which properties we were interested in. It was really heartbreaking.”

While the dismay at having to resort to such measures to secure affordable housing was evident among those queuing, Ms. Hamilton-Shaw and her fellow buyers worked together to keep the mood positive.

“It has been really emotional, just feelings of excitement and anxiety,” she said.

“It was freezing throughout the night, but everyone seemed to be in good spirits, and that helped pass the time.

“And technically, those of us that have the properties are now all neighbours, and we have made friends for once we move in.”

A price worth paying

The affordable housing up for sale was located at a site called Cwm Heulwen, where three-bedroom properties were up for grabs at a price of £184,950 and four-bed homes were available from £320,000.

Average property prices in Wales are currently hovering around £210,000, with both of the above prices being significantly lower than typical homes of a similar size and specification.

34-year-old Hanna Owen, who was one of those who queued overnight to secure one of the 13 new homes available, told the BBC that while the situation was quite shocking, spending a night outdoors was a price worth paying to become a homeowner at the end of it.

“My mother-in-law walked past and told me there was already someone waiting there, and she got in behind, so we ended up being second in the queue,” she told the BBC.

“My sister-in-law and niece took over from 17:00 BST, and then me and my mother-in-law were there from 22:00.”

“It was freezing cold, and my mother-in-law went back to the house numerous times to get bottles of water and flasks of tea,” she said.

“When my sister-in-law first suggested queuing early, I thought she was joking, but I am so glad I did; you have got to be in it to win it.”

“It felt like such a long night, but when I think about it, it’s gone so quickly, and it’s only now kicking in that we are homeowners.”

Recent figures have indicated that record numbers of renters and homeowners have been setting their sights on properties outside major urban centres. London in particular was predicted to experience a major exodus throughout 2021 prompted by COVID-19; city centre flats and quick commutes to work are out, while spacious properties in quiet and secluded corners of the country are becoming increasingly popular.

The shift has inevitably had a major impact on the average asking prices of many types of properties, with larger homes seeing the largest spike in demand of all. A new report published by Ascend Properties suggests that the lockdown detached property price boom is being fuelled largely by the property market in the Northwest, not the exodus currently taking place in London.

Average detached property prices are up nationwide

New figures from Ascend Properties indicate that the average market value of a detached home in England has increased by over 7% since the start of lockdown, climbing from £349,995 to £375,000.

The average price growth of 5.7% was also achieved collectively across all property types, which increased in value from £210,000 to £222,000 since the start of lockdown.

In the Northwest, the average market value for a detached home before lockdown restrictions were enforced was approximately £280,000; at the same time, the average price across all other property types was £147,000, a difference of approximately 90%.

Today, detached homes in the Northwest are selling for an average price of £299,995, while the average market value of all other property types is currently standing at £153,000, a difference of 96%.

On average, detached properties in the Northwest have increased in value by 7.1% since the start of the lockdown, the strongest growth of any region in England.

The Northwest of England leads the way

Commenting on the findings, Ascend Properties spoke of several reasons why detached property prices continue to climb across certain regions. “There may well be a shortage of homebuyers leaving the capital in search of larger homes, but the figures show that the North West is actually leading the way where this trend is concerned,” said Ascend Properties managing director, Ged McPartlin.

“Not only does the region rank top for detached property price growth since lockdown was first implemented, but detached homes are also pulling away from the rest of the wider market in terms of the rate of price appreciation.”

“That is not to say other property types are not selling well; there has been strong growth across the board. However, with more buyers searching for larger homes, it does present a good opportunity for first and second-time buyers who are able to find a flat or smaller home for a good price now that there is less competition.”