House prices have increased by nearly 11 per cent in the past year – fuelled primarily by the stamp duty holiday, ultra-low borrowing costs, and savings built up by households during the pandemic. Although most homeowners have properties worth more than ever, investors have also participated in this housing boom.
For example, over the past year, shares in Barratt Developments and Persimmon – both constituents of the FTSE100 Index – have risen by 52 and 35 per cent respectively. And while some investment experts warn of a possible housing market correction hitting profits housebuilders make from new builds, most believe the outlook is positive.
Demand for new homes, they say, will continue to be fuelled by an acute shortage of residential property – and also by the desire of many people to take advantage of changing working practices brought about by the pandemic and move to more suburban or rural locations.