Everyone has their own unique approach to safeguarding their financial future. There is no such thing as a one-size-fits-all strategy, as it depends entirely on the current financial circumstances and long-term goals of the individual in question.

One of the most contentious points on the subject of future planning is whether it makes more sense to repay your mortgage early or put more money into your retirement pot. Both of these could technically put you in a much stronger financial position in years to come, but which of the two is more advantageous?

Should you pursue the tax benefits of more pension savings at your disposal or enjoy the freedom of a life with no outstanding mortgage payments?

Overpaying your mortgage

For most people, their mortgage is the single biggest debt they will take on during their lives. Where possible, it can be tempting to overpay your mortgage in order to pay off the full balance earlier. Whether you overpay regularly or on occasion is up to you, but the overall benefit is the same: mortgage freedom much sooner.

Overpaying your mortgage can be beneficial in numerous ways. You quickly build equity in your home, enabling you to access much better deals if you decide to remortgage or borrow more. In addition, repaying early can lead to significant savings in long-term interest payments and overall borrowing costs.

Early repayment of a mortgage also means taking full ownership of your home at an earlier date. After which, you will no longer face the potential risk of your home being repossessed in the event that you fall behind on your repayments.

With average monthly mortgage payments in the UK now exceeding £750, this amounts to a lot of extra money in your pocket each month after repaying your mortgage early.

Paying towards your pension

The alternative option is to continue repaying your mortgage as normal while investing your extra money in your pension pot. One of the biggest benefits of doing so is the tax relief associated with pension funds, as by adding to your pension pot, you are effectively reducing your taxable income.

For example, each time you pay £100 into your pension pot, HMRC tops it up with a further £25. This increases to £50 for higher-rate taxpayers, who stand to benefit even more from the tax incentive.

Each year, you can pay anything up to £40,000 into your pension pot, which, over the course of several years, could add up to significant pension savings.

What works for you?

As touched upon previously, making the right decision means deciding what works for you. It depends entirely on whether you want to have more money in your savings when you retire or benefit from mortgage freedom. Both of which could make a huge difference to your financial security following retirement, though in somewhat different ways.

If in doubt, consult with an independent broker or financial adviser in order to gain a better understanding of the pros and cons of both options.

Between September and October this year, housing transactions fell by a whopping 52%, according to HMRC. With the stamp duty holiday saving buyers in total over £6.4 billion, it’s not surprising that property purchases have fallen so dramatically. At the same time, the average home price has risen by £28,000, making it more difficult for many to get a foot on the property ladder.

Last month, the UK saw 77,000 property transactions, indicating a 52% fall from the previous month and a 28% drop from last October. HMRC said the decrease was primarily due to purchases being pushed through in time for the September 30th deadline.

The stamp duty holiday was initially brought about to boost the property market following the 8-week shutdown during the initial lockdown. Buyers were no longer required to pay stamp duty for property prices up to £500,000 between the months of July 2020 and June 2021, tapering off and eventually being fully withdrawn at the end of September 2020. This initially led to savings of up to £15,000 for home buyers and up to £2,500 during the tapering period.

Although there has been a recent home sale plummet, during this financial year there have been 842,250 property transactions, the highest recorded in a decade. In 2021, transactions peaked in March, June, and September.

With the stamp duty holiday creating a boosted property market, it’s not surprising that experts are calling for the tax to be scrapped permanently.

Director of property lender MT Finance, Joshua Elash, commented: “The monthly decrease in the volume of residential transactions is dramatic.”

‘The argument for either reworking or scrapping stamp duty together has never been louder or clearer.

‘Stamp duty is the tax holding back a property market that would benefit now more than ever from greater levels of fluidity.’

Although in total buyers saved £6.4 billion, data shows that due to factors driving up property prices, house prices were significantly higher.

Figures from the Office of National Statistics show that the average price of a home rose by £28,000 in the year up to September, signifying an 11.8% year-on-year increase.

CEO of The Guild of Property Professionals, Iain McKenzie, said: ‘A sharp drop in property transactions in October suggests that forestalling since September has caught up with the property market.’

He also stated that even though property sales were down, house prices were likely to keep increasing in the short term.

‘While transaction numbers may be lower now that the stamp duty holiday has ended, the fact that the demand for properties currently far outstrips supply means that prices are likely to keep rising,’ McKenzie added.

‘At a time when there is often a rush to get moved in before the festivities commence, we should expect that sales will continue to be steady in the run-up to Christmas.’

Others have, however, predicted that property prices are destined to fall as a result of the expected rise in the Bank of England’s interest rate, which will result in more expensive mortgages.

As the UK continues its slow but steady crawl back to normality, new names are emerging as investment property hotspots; a full 19 new locations across England and Wales have officially joined the ‘million-pound property locations’ of Knight Frank.

In order to qualify for this prestigious list, a location must have achieved at least 20% of all property sales beyond the £1 million threshold by March 2020.

The COVID-19 crisis had a profound effect on the UK’s real estate sector, massively boosting property prices in some areas while decimating the market elsewhere. Among those that have performed particularly strongly over the past year, the following have been recognised as million-pound property locations for the first time:

Postcode	Location	Quarters with over 20% £1m sale	Average Price (Sept ’20 to March ’21)
N20	Whetstone	4	£878,631
GU10	Farnham	4	£772,924
TN7	Hartfield	3	£1,082,029
KT2	Kingston upon Thames	3	£926,536
W5	Ealing	3	£792,677
NW7	Mill Hill	3	£765,712
KT22	Leatherhead	3	£764,596
N8	Hornsey	3	£756,198
W13	West Ealing	3	£755,704
RH8	Oxted	3	£719,737
SW8	Vauxhall, Nine Elms	3	£707,152
TN3	Tunbridge Wells	2	£822,332
OX2	North and West Oxford	2	£813,735
N19	Upper Holloway	2	£777,488
E8	Hackney	2	£763,371
RH3	Betchworth	2	£747,268
RG8	Reading	2	£737,974
NW4	Hendon	2	£706,591
GU23	Woking	2	£610,815

The impressive figures from Knight Frank paint a picture of a property market that has seen a significant shift over the course of the past 18 months.  Specifically, demand has been driven by movers and buyers setting their sights on greener corners of the country with more space to enjoy time spent at home.

Lockdown restrictions have forced the vast majority of households to reconsider their priorities while highlighting the necessity and value of private outdoor living spaces. As larger homes with private gardens have traditionally been prohibitively expensive in busy urban centres, those seeking sanctuary have been doing so away from the usual city-centre hotspots.

As a result, there has been a major surge in the popularity of certain types of properties in specific areas of the country; larger detached houses with private gardens, either in the countryside or by the coast have become the properties of the moment for those able to afford them.

All of which has triggered explosive property price growth in some of the quieter corners of the country, including the following standout examples highlighted by Knight Frank:

• Newquay, Cornwall (+22%).
• Ryde, Isle of Wight (+19%).
• Chapeltown, Leeds (+19%).
• Lymington, the New Forest (+18%).
• St Austell, Cornwall (+17%).

There are those who remain adamant that the new norm of working from home will indeed prove to be a temporary trend, ultimately paving the way for a return to town and city living.

Once again, the latest figures from the HomeLet rental index indicate that London is the most expensive place in the UK to rent a property from a private landlord. The average monthly rent in London has climbed a further 6.4% since the same time last year, now coming out at £1,752 per calendar month.

The second most expensive region in the UK for renting remains the South East of England, where it now costs an average of £1,139 per month to rent a home privately, 6.1% up from the same time last year. The South West has also seen significant monthly average rent growth over the past 12 months, up 7.6% to reach a new high of £971 per calendar month.

At the opposite end of the scale, the cheapest place in the UK for private rentals is the North East of England. Average rents in the region now stand at £578 per calendar month, up just 1% from the month before and an increase of 3.6% since September.

On average, it now costs £1,061 per month to rent a home privately in the UK, an increase of 7.5% from last year and a 0.8% increase from September.

The second-cheapest place to rent a home in the UK is Northern Ireland, where the average monthly rent now stands at £705. This was followed closely by Yorkshire and the Humber with an average monthly rent of £725, after which came Wales at £734 and the East Midlands at £735.

Wales recorded the highest annual growth of all, with average rents increasing by just under 13% since the same time last year. Scotland came in second with an average monthly rent growth of 10.8% over the past 12 months.

Issues with affordability

Private renters in London continue to spend the largest proportion of their income on rent than those in other parts of the UK, a full 33.7% of their take-home pay. By contrast, renters in the North West spend, on average, 22.1% of their income on monthly rent bills.

Head of marketing at HomeLet & Let Alliance, Matthew Carter, commented on how the ongoing gap between supply and demand is continuing to fuel sky-high rents.

“Typically, rental prices rise in line with inflation and wage growth; that’s something we’ve continued to see. Despite record rents, tenants moving home spend a similar percentage of their income on their monthly rent,” he said.

“Housing follows the same fundamental laws of economics as other goods that consumers need. Ultimately, demand, coupled with lower stock levels for certain types of property, is driving up rental values. The concern is that we’re at a point where there are some areas with exceptionally high demand. Landlords and the lettings market have faced a continued raft of changes and legislation; the government needs to carefully consider how any future policy might impact the 4.5 million households in the private rented sector. The government’s push on homeownership shouldn’t be done to the detriment of an industry that plays a critical role in UK housing.”

The figures are in, and Toxteth has been named the fastest property price growth location in the country right now. A surprise leader at the top of the table, property prices in Toxteth have skyrocketed an astonishing 20% on average over the past 12 months.

Rightmove’s latest round-up of property price growth figures indicates similarly impressive performance for house prices in Accrington in Lancashire, Retford in Nottinghamshire, and Heywood in Greater Manchester, all achieving 19% growth over the course of a year.

The top ten property price growth locations remain dominated by hotspots in the North West, where the region as a whole has seen an average house price increase of 8% since September 2020.

Record asking prices across the country

The figures from Rightmove suggest that property prices have hit record highs in more than 70% of areas across the country since the beginning of the year. Overall average house prices in Britain are currently up 5.8% compared to the same time last year, reaching a new average asking price of £338,462.

Speaking on behalf of Rightmove, director of property data, Tim Bannister, said that record-high prices continue to be fuelled by unprecedented demand and competition among prospective buyers.

“The number of homes for sale is at a record low, and buyer demand remains high,” he said.

The full listings of the top 10 property price growth locations in Britain published by Rightmove are as follows:

• Toxteth, Liverpool, and Merseyside, £151,958, 20% higher than September 2020.
• Accrington, Lancashire, £139,220, 19% higher than September 2020.
• Retford, Nottinghamshire, £210,761, 19% higher than September 2020.
• Heywood, Greater Manchester, £194,634, 19% higher than September 2020.
• Brixham, Devon, £318,859, 18% higher than September 2020.
• Crowborough, East Sussex, £501,537, 18% higher than September 2020.
• Aberdare, Rhondda Cynon Taf, £165,322, 18% higher than September 2020.
• Moortown, Leeds, West Yorkshire, £327,804, 17% higher than September 2020.
• Penwortham, Preston, Lancashire, £251,478, 17% higher than September 2020.
• Great Sankey, Warrington, Cheshire, £270,621, 16% higher than September 2020.

With an average property price of just under £152,000, Toxteth in Liverpool remains one of the cheapest areas in Britain to buy a home. Average house prices in the region have increased significantly from the £126,806 recorded in September last year.

Representing James Kristian Estate Agents in Liverpool, Warren Matthews said that ongoing improvements across the region had resulted in much greater interest among investors and first-time buyers alike.

“This has pushed demand up, increasing prices in the area, and we’re still seeing high levels of buyer interest as we approach the final months of the year,” he explained.

Time spent in lockdown has forced much of the British public to rethink their priorities; this has meant setting their sights on more spacious properties to allow them to work, play, and generally spend more time enjoying the homes they live in.

It seems a year and a half with life more or less “on hold” has not put a dampener on the dreams of many who want to own a home in the UK. When taking a look at the top-viewed properties on Rightmove, it is an extremely ambitious list, to say the least.

“We’ve seen the busiest ever first half of a year in 2021, and while much has changed in the housing market, the nation’s obsession with property and searching for their dream home has stayed the same,” said Tim Bannister, director of property data at Rightmove.

“From vast open views over Lake Windermere to an Essex mansion complete with a private gym and equestrian centre, it’s clear the luxury end of the market is still piquing the nation’s interest.”

You would expect the most-viewed properties in Rightmove’s listings to be homes those viewing them can afford to buy; things seem to have headed the opposite way as of late. Unless you have between £2.5 million and £30 million burning a hole in your back pocket, Rightmove’s top-viewed properties simply will not fit in your price range!

Here is a quick overview of the properties on Rightmove that are getting the most attention from the British public right now:

• Five-bedroom waterfront property, Lake Windermere, £2.4m: First up, this year’s most heavily drooled-over property so far is a fantastic Lake District pile with five bedrooms and an asking price of £2.4 million. It boasts some of the most fantastic views on all sides and even has its own slipway, opening the door to a world of fun on the water. After all, anyone able to afford a home like this can probably afford a decent handful of water toys, too.
• Five-bedroom mansion, Essex, £15m: Stepping things up significantly price-wise, this is a five-bedroom house situated on its own premium plot of 52 acres of private land. The fabulously traditional exterior masks a super modern 10-car underground car park, complete with its own electric lift and turntable for easy access. Not to mention a swimming pool, a jacuzzi, and all the usual refinements.
• Five-bedroom mansion, Cornwall, £2.5m: Anyone setting their sights on the southwest should definitely consider this idyllic Cornish property, which boasts breathtaking views over Restronguet Creek. With its five bedrooms and £2.5 million price tag, it is the first time this particular property has ever been put up for sale publicly.
• Ten-bedroom mansion, Surrey, £30m: If five bedrooms simply won’t cut it, why not pick up the most expensive home currently listed on Rightmove? For the modest price of just £30 million, you can bag yourself a Surrey estate with 10 bedrooms, an indoor swimming pool, and pretty much everything else you could ever wish for.
• Ten-bedroom mansion, Devon, £5.95m: There is another 10-bedroom dream estate listed on Rightmove with an asking price of a meagre £5.95 million. If you have ever dreamed of living in a home with an interior not dissimilar to that of Downton Abbey, now is your chance. Only if you’ve got the cash to cough up for such an idyllic pad!

New figures suggest that the vast majority of brokers are optimistic about what the next 12 months are going to bring for their businesses. According to the latest data published by Masthaven Bank, more than 90% of brokers are confident about the year ahead.

This represents an increase of 3% from the previous 87% Masthaven reported in its Broker Beat survey.

The survey took into account the views of 186 brokers, among whom 77% predicted an increase in overall sales and revenues for their businesses this year. Furthermore, a full 42% said they expected to achieve double-figure growth over the next 12 months.

Conversely, just 3% said that they expect to see a decline in sales during the same period of time.

An optimistic outlook for the property market

Asked for their views on the immediate outlook for the real estate sector, 88% of the brokers polled said that they were either “confident” or “very confident” about its future. At the end of last year, a significantly lower 71% expressed optimism for the property market’s future prospects.

Masthaven said that the growing optimism among brokers reflects the UK’s gradual return to normality and a general increase in consumer confidence.

Economic uncertainty

Asked about the specific challenges their businesses are currently facing, 26% of brokers cited lingering economic uncertainty as their biggest current cause for concern, though this indicates an improvement since the end of last year.

Lenders’ service levels were also highlighted as a concern by 25% of brokers, while a further 16% said the prospect of future lockdowns represented a threat to their businesses.

A quarter of brokers are concerned about lenders’ service levels, while 16% believe the biggest problem they face is further local or national lockdowns due to COVID-19.

Speaking on behalf of Masthaven, director of intermediaries Rob Barnard paid tribute to the efforts of the sector to help movers and first-time buyers over the course of the past 18 months.

“The industry has worked tirelessly to support homebuyers since the start of the pandemic,” he said.

“This hard work, combined with pent-up demand from early 2020 and government support in the form of the stamp duty holiday, has resulted in a booming property market, but there are still challenges on the horizon.”

“The government’s various COVID support initiatives will be coming to an end soon, with the furlough scheme expected to wind down in September.”

“The withdrawal of this support will undoubtedly be felt by some borrowers.”

Preparing for new challenges to come

Mr. Barnard also emphasised the importance of brokers continuing to work as closely as possible with clients over the coming months, due to the potential for additional challenges to affect prospective borrowers.

“As the market enters this next phase, brokers and lenders alike will need to work together closely to support all customers, but particularly those who have been heavily affected by the pandemic,” he said.

“Innovation and collaboration will be key in ensuring the industry continues to provide products tailored to customers’ needs.”

The UK’s real estate market has seen a number of seismic changes during the course of the COVID-19 pandemic. One of which has been a complete change in priorities for millions of workers, who have found themselves either entitled or obligated to work from home.

According to recent data published by A-Plan Insurance, 90% of the UK’s top areas for house price growth over the past 10 years were in London.

Waltham Forest saw the strongest growth since 2011 at a staggering 126%, followed by Hackney at 105% and Dagenham at 96%. Greenwich, Bexley, and Newham were also ranked within the top 10 hotspots.

But what’s interesting is that while house prices remained disproportionately high in most areas of London, investors are increasingly setting their sights on potential future hotspots. Of which, many are further north.

Dale Anderson, managing director of Fabrik Invest, explains:

“Looking ahead ten years, it’s easy to imagine that nine out of the next ten property hotspots will be in the North. We’ve seen a huge shift in investor interest from south to north in recent years. That’s because northern cities are delivering greater potential for capital growth, better yields, and strong, sustained tenant demand,” explained the managing director of Fabrik Invest, Dale Anderson.

A new market front runner?

Elsewhere, Savills recently published figures suggesting that the highest property price growth over the coming five years will happen in the North of England. Specifically, forecasts from 2021 to 2025 indicate possible house price growth of just under 29% in the Northwest, followed by 28% in Yorkshire and the Humber.

By contrast, the broader average increase across the rest of the UK is expected to hover around the 21% mark.

While this is happening, London, the South East, the South West, and the East of England will see average house price increases of around 12.6% to 18.7%. Understandably, investors are setting their sights on property investment opportunities in the North with the kind of interest and enthusiasm not seen in some time.

“The Northern Powerhouse initiative opened a lot of investors’ eyes to the potential of the North. At the same time, so many ‘best place to live’ type accolades are going to northern cities,” continued Anderson.

“Add in the fact that increased working from home has cut many families’ ties with specific locations, meaning they can head north in search of better value, and there’s a clear case for this region leading the UK over the coming decade.”

Two major driving forces

One key factor behind the northern boom is the extent to which major cities like Manchester, Liverpool, and Birmingham have seen such heavy investment in infrastructure and general redevelopment works over recent years.

Average property prices are still comparatively low in such cities, but living standards are accelerating rapidly. The average home in Manchester costs just £187,100. In Birmingham, it’s £178,500.

In addition, the pandemic has played a major role, as millions have embraced the opportunity to work predominantly or exclusively from home. Many of them have abandoned London in search of greener pastures up north, where their money is worth considerably more than it was in the capital.