Property firm Rightmove predicts UK house prices will rise further in 2021, despite Brexit, the ongoing coronavirus pandemic and whether the government chooses to extend the current stamp duty holiday. There is.
Asking prices have risen by around 7% this year, but by another 4% over the next 12 months as the UK property market continues to see the trend of city visitors moving to suburbs and countryside to escape infection rates in urban areas. is expected to rise.
Graph courtesy of rightmove.co.uk.
Rightmove noted that following another lockdown in the spring and autumn, the pandemic forced Britons to rethink their accommodation needs, increasing demand for larger properties with outdoor space.
The report said the stamp duty holiday introduced in July gave the property market a further boost, but demand was already strong before that and opportunities to take advantage of the March holiday deadline are rapidly diminishing. Despite this, he confirmed that he remains “resilient.”
Despite this, there are still growing concerns among estate agents that sales inquiries will stagnate in 2021 as the government’s furlough scheme and stamp duty holiday both come to an end in the spring. are.
However, the new year is expected to be a busy season for sales, as around 650,000 properties are currently still being converted. Rightmove’s 2021 House Price Index report explains:
“2021 is going to be a busy start. While the new year is usually a time for setting resolutions for the coming year, many will see 2020 as an opportunity to put a break, including a fresh start in a new home. For those who have not yet taken action. Many businesses have already done so since the UK market reopened in May, with the seasonally quiet run up to the Christmas period reducing the likelihood of completing purchases before the stamp duty deadline. Yet more and more companies continue to do so. ”
Rightmove CEO speaks out
Despite expectations for a slowdown in home sales in the second quarter, Rightmove CEO Tim Bannister says the real estate market is resilient after years of uncertainty. The company is adamant that this has been proven, and says there is evidence that buying appetite remains strong despite coronavirus restrictions.
“Pandemic-related uncertainty has been around for nearly a year, Brexit uncertainty has been around for much longer, and record monthly activity means movers are prioritizing new or existing homes. Therefore, demand will exceed supply in 2020. Year-to-date, the number of properties on the market has decreased by 0.6% compared to the same period in 2019, and the number of sales agreements has decreased by 8.3%, resulting in the lowest number of properties available for sale. “Despite these uncertainties, there is room for some further price growth overall in 2021.”
Bannister added: “Despite these headwinds, continued demand remains very strong, indicating there is plenty of fuel left in the tank for the residential market.” Interest rates are near record lows, and we expect more low-deposit home loans at competitive rates to become available next year. These two factors will help fuel home purchases for ‘accidental savers’ who have saved a total of £100bn that they could not spend during the pandemic restrictions.
“With a return to more normalcy expected in the second half of 2021, and perhaps a ‘fresh start’ mentality for some, the positives will outweigh the economic, political and health challenges ahead. There are good reasons for market sentiment to persist. Rural, countryside and coastal areas will remain in high demand as people re-evaluate their lifestyles, but more normal living will also restore aspects of city life that have become less attractive. . ”
Agent’s view
Nick Leeming, chairman of Jackson Stops, commented:
“The start of a new year is traditionally a busy time for the housing market, with buyers and sellers alike using this festive period to make plans for next year. We expect the first few months of 2021 to be particularly active, as the stamp duty holiday is a big hit, so anyone looking to save on the stamp duty holiday needs to act now. , advises to submit offers no later than January.
“Changes in lifestyle aspirations spurred by the COVID-19 pandemic will keep buyers and vendors at the top and very top of the market on the move throughout 2021. Many of our customers have been dealing with the impending move or purchase of a second home. The introduction of a viable vaccine will be a blow to the housing market and restore confidence at all levels, while the reinstatement of SDLT will While the top end of the market will remain resilient, lower-end transactions will slow.”
Marc von Glander, director of Benham & Reeves, also commented:
“This year of concern for the UK property market, we will definitely see a sprint finish. This is largely driven by government stimulus in the form of a stamp duty holiday, with the traditional It protects the market from lethargy and keeps it healthy, both in terms of trading levels and price growth.
“This wave of market momentum will continue to spill over into next year, keeping the market buoyant as homebuyers race to save stamp duty and get over the line before Rishi Sunak’s checkered flag falls. We expect that the end of this initiative will result in a number of It is natural that demand will fall during the month, but rather than a dramatic collapse in the market, this will largely be due to the strong foundations built this year. This should enable strong and consistent growth throughout 2021.”
