The team at UK-based Blend Network, an online P2P lender, notes that after a “short-lived” slowdown, the United Kingdom annual house price growth managed to recover with “renewed vigor” in February 2021.
Blend Network writes in a blog post that January 2021 saw price growth “slow down for the first time in six months,” but according to the Nationwide House Price Index, the month of February saw “prices up by an impressive 6.9% year-on-year.”
Blend Network added that many market participants who may have been expecting house price growth to “ease further” ahead of the end of the stamp duty holiday (planned for March 31, 2021) were “taken by surprise by this sharp pick-up.”
The peer to peer lender pointed out that “since then a plethora of ‘good news’ for the property market, i.e. the extension of the stamp duty holiday and 95% government-guaranteed mortgages for first-time buyers announced in the Spring Budget on 3 March, have injected a considerable amount of optimism and confidence into the UK property market.”
Blend Network added:
“Following a very short-lived slowdown at the start of the year, the momentum seen in the UK annual house price growth over the past six months returned in February. February saw prices up by an impressive 6.9% year-on-year, the second strongest reading since December 2014. The performance of the UK housing market amid the pandemic has been nothing short of impressive. Indeed, since July 2020, UK house prices have increased by an average 5.4% year-on-year every single month, while so far in 2021 prices are up by an average 6.7% year-on-year in the first two months.”
Blend Network further noted that after the “positive” property market news of stamp duty holiday extension and additional support for first-time buyers announced by the Chancellor Rishi Sunak, the platform’s management anticipates or expects that the price momentum may “continue over the next few months.”
The market report from the P2P lender explained that the stamp duty holiday extension “allows anyone buying a home worth up to £500,000 before the end of June to not pay tax, potentially saving buyers up to £15,000.” The lending platform’s management added that they “expect this to be particularly positive news for the segment of the market we operate in at Blend Network because we operate in exactly that price bracket of <£500k per housing unit.”
Blend Network further noted that they think their strategy of funding low-cost housing “targeted to first-time buyers is now more relevant than ever before.”
They added:
“Since we launched, we bet on this strategy because we identified that the UK has a structural shortage of housing. Our strategy of funding £100-200k flats or £200-400k houses has so far proved right and we believe this will be the case even more so now.”
Blend Network confirmed that they “welcome the strength of the housing market and the positive news announced in the Spring Budget.”
They concluded:
“We believe this could mean many of the developers we speak to and who had been sitting on projects awaiting more clarity, will decide to go ahead with their projects, which of course could mean more great risk/reward, 8-12% return p.a., property-secured loans for our hundreds of yield-seeking investors.”
