05 Jan Residential Property Review- December 2020
Our monthly property market review is intended to provide background to recent developments in property markets as well as to give an indication of how some key issues could impact in the future. We are not responsible or authorised to provide advice on investment decisions concerning property, only for the provision of mortgage advice. We hope you will find this review to be of interest.
POSITIVE START FOR PROPERTY MARKET IN 2021
The property market is expected to start 2021 with a bang, according to experts. Low interest rates, combined with the imminent expiry of both the existing Help to Buy scheme and the Stamp Duty holiday, mean that the market is expected to be busier than ever going into the New Year. Zoopla has already predicted that this December will be the busiest for the housing market in over 10 years; this is expected to spill into 2021 with an additional 100,000 home sales forecast in the first three months of 2021, as buyers rush to take advantage of the Stamp Duty tax cut ahead of the 31 March 2021 deadline. Property companies have also seen a distinct shift in buyers’ priorities this year, with many believing that new attitudes will continue to inform the housing market into 2021. Michael El-Kassir, Managing Director of property developer GRE Assets, said, “With the imposed lockdown restrictions meaning people have spent much more time at home this year, we believe this has led to a distinct rise in the number of people seriously considering their next property move.” He continued, “Not only are they spurred on to make the leap from London, they also recognise the importance of having access to green space, whether that is nearby parks, balconies, terraces, and gardens.”
HOUSE PRICE GROWTH HITS FIVE YEAR HIGH
House prices have continued their upward trajectory towards the end of 2020, with annual growth of 6.5% recorded in November – up from 5.8% in October and the highest growth rate since January 2015. This is according to the latest House Price Index from Nationwide, which also recorded a month-on-month price increase of 0.9% to bring the average house price to £229,721 in November, up from October’s increase of 0.8%. Robert Gardener, Chief Economist at Nationwide, warned that this rate of growth was unlikely continue, however. He said, “Housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the Stamp Duty holiday expires at the end of March.”
WHAT WERE HOMEBUYERS’ TOP PRIORITIES IN 2020?
A garden was the most desired characteristic for homebuyers 2020, topping the list of Zoopla’s 10 most popular search terms for this year. The list shows that buyers’ top priorities have been greatly influenced by the pandemic, with ‘detached’, ‘rural’ and ‘secluded’ also ranking highly. Being locked inside their homes for months on end has demonstrably increased property hunters’ desire for green, open space and a quiet, peaceful lifestyle. Also, in line with this theme was ‘balcony’, which placed eighth on the search list. Meanwhile, ‘annexe’ was in ninth place, perhaps reflecting buyers’ desire to have elderly parents move in with them due to the pandemic.
All details are correct at the time of writing (15 December 2020)
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
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