The post-lockdown recovery in house price growth and housing market activity has exceeded expectations. But the economy will act as a drag on the housing market in the coming months, while pent-up demand will soon be expended and the stamp duty cut will end early next year. As a result, we expect the nascent housing mini-boom to soon end – stalling house price growth, pushing activity back below its pre-virus level and limiting the recovery in housing construction. Meanwhile, we expect rents to see a modest fall next year, as virus restrictions hit renters harder than owner occupiers.
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