Property Market rebounding 2021
The arrival of the Covid vaccine has brought sunshine into an otherwise rather grey, dull horizon! However, this is not the only reason for optimistic predictions for the UK property market in 2021. It has always been resilient, and the “bricks and mortar” investments have been stable in a time of unrest and uncertainty caused by the Covid-19 pandemic. This can be evidenced by property professionals all over the UK, including the estate agents in Notting Hill.
Other reasons for the rebound in the property market in 2021 are given below:
SDLT exemption: The stamp duty land tax “holiday”, at present valid till 31 March 2021, has caused a significant surge in home sales/purchases. Properties up to £500,000 are exempt from tax for first time buyers in England and Northern Ireland. There is a benefit for the second home buyers/investors too – instead of paying escalating tax (from 3% to 8% from the first £ 125,000 to up to £ 500,000), they now pay only 3% surcharge on the total £500,000. The buyer, who pays the tax, is the greater beneficiary, but the seller can also benefit by negotiating and quoting a higher price for the property.
Deadline: Due to the tax holiday ending on 31 March 2021, there has been a surge in property sales, with more people trying to ensure that all documentation is completed in time, to avail of the benefits. Should the deadline be extended, then property sales will continue to prosper.
Space: More people are now working from home, due to lockdowns. Some are considering doing this permanently. They are looking for facilities that will offer comfort and ease for living at home and working online. This entails substantial living accommodation with larger outdoor space for a garden or relaxation. It is the reason why many are considering moving to suburbs or more rural areas. This raises the demand for buying their own homes, if the affordability is there, or renting – leading to a rise either way in the property market.
Supply vs Demand: The demand exceeds the supply, which defines the prediction of more home sales. The demand does not seem to be slowing down, leading to increased property sales or rentals. It has been noted, especially when there is a crisis, that rental prices seem to be more stable than house prices. Hence, this is likely to continue, especially after the covid vaccine has been administered successfully. Students will return, especially to universities, and they form a large portion of the rental market.
Virtual viewing: With all the benefits of virtual viewing of properties, nothing is as good as a physical inspection. If the pandemic dies down quickly, then these can be resumed, and physical property surveys undertaken, leading to quicker verification and decisions, probably resulting in a hike in sales.
Mortgages: Applications for mortgages have been on the rise, and there are some competitive schemes available. Fixed rate mortgages are usually more popular, where the interest is set for a certain period, and so the buyer knows the exact amount to be paid monthly. Variable rate mortgages depend on changes to the Bank of England base rates, and the monthly amounts will vary. Fixed rate mortgages were more expensive, but they are now so popular with competitive rates that investors with large deposits can obtain a low rate interest, comparable or even better than a variable rate mortgage.
“Accidental” savings: Though it seems unlikely, some people have been able to save during the lockdowns by not spending what they usually would on entertainment, leisure and holidays. Consequently, this could lead to a percentage of them investing their savings in property.
Covid vaccine: The implementation of the vaccine and its hopeful success will gradually lead to a period of almost normalcy. This could result in public areas, like shopping malls, restaurants, pubs, gyms etc, being reopened, which will attract more customers. Reopening of offices could also be resumed. This could impact the property market for buyers wanting to invest in properties in the cities and other urban areas. The furlough scheme has been extended, allowing employees the security of maintaining their employment. When the economy improves with the arrival of the Covid vaccine, more people will be financially secure. This, too, could affect the property market, with investment in property and rentals.
Conclusion: Considering all things, with the ups and downs experienced during the current pandemic, the idea that the property market will rebound in 2021 remains stable. Of course, all the pros and cons will have to be gone through for those probable buyers before a final decision is taken. To offer guidance, there is none better to help than an experienced, professional real estate agent, especially since buyers want local expertise and advice.