What will the Property Market Look Like in 2021?
With the pandemic, the expectations of the property market in 2020 were not at an all-time high. However, unexpectedly, it turned out to be a bright year with an increase in the sale of properties towards the end of the year. How will the market be affected in 2021? All real estate agents, including the estate agents in Buckingham, are hopeful that the property market, which has shown resilience through the chaotic period caused by the pandemic, will continue to prosper.
Some factors which could affect the housing market are defined below:
SDLT holiday: With the new Budget announcing the Stamp Duty Land Tax holiday extension till the end of June and tapering till 30 September 2021, many investors have been flooded with relief! This extension will probably keep property sales and prices on the high side.
Type of accommodation: The lockdowns, causing people to remain indoors, resulted in a change in outlook on the accommodation desired for a home with working space. Larger accommodation with more outdoor space and amenities for relaxation became a trend that is likely to continue. With some employers being flexible with working from home, at least on a part-time basis, more people have moved from cities to the suburbs or rural areas once the lockdowns are over. This could result in a continued rise in sales and prices in areas away from cities.
On the other hand, there is a prediction that, once the lockdowns are lifted, and normalcy returns to city life, with the reopening of offices, restaurants, entertainment venues, commuting and other enticing incentives, people will be drawn back to life in cities. Some employers may restrict working online, which could cause employees to return to offices. For others who work in the hospitality, retail, catering and entertainment sectors, returning to places of employment is inevitable. This may result in a slight rise in sales of property in city areas.
Covid vaccine: With the vaccination programmes ongoing, everyone is hopeful of a better and healthier future. This could result in a boost in the economy, which, in turn, will have a positive effect on the property market as well. With schools and universities reopening, the student rental market could also rise substantially.
Unemployment: With the furlough scheme due to end, there is a likelihood of unemployment rising. Some people with reduced income will be under pressure to keep up with mortgage payments and may be forced to sell property quickly, which will cause prices to fall. With no affordability to save for deposits and purchase properties, the rental market could see a rise.
Unforeseen savings: For some people, with the lockdowns, overhead expenses and commuting costs were cut, which led to incredible savings! This has enabled many people to invest in properties that have also hiked sales.
Virtual viewings: Despite the lockdowns, the property market has remained open and virtual viewings have helped boost prospective buyers who have not been able to carry out physical inspections. Although physical viewing will always be a preference, the online surveys of properties have helped keep the property market stable.
Buying to Let: Some commercial investors have considered looking at 3 and 4 bedroom properties, rather than office spaces, to meet the demand of the majority of the public, especially with the lockdowns and online working. Areas with good internet facilities and convenient transport links to cities are assets and will also add to the value of the property. This will also affect the market.
Let to Let: Despite the desire for more space and larger accommodation, moving to such an area is very expensive. An alternative has been for people to let their homes and rent bigger accommodation, thus being able to cover the costs of upkeep and maintenance. This trend could also affect the housing market to some extent.
Open Banking: This facility of allowing an owner, with the prospective tenant’s permission, of course, to link to his Bank account and assess his credibility has helped to speed up the process of closing a deal. Consequently, it has led to an increase in business.
Economy: So much is dependent on the economy, and with the hopeful boost of the same in 2021, the property market could expand as well, with more foreign investment coming in. The SDLT holiday has applied to foreign investors as well, which has been beneficial. As the economy recovers, the Government will enlist schemes to help the public, which will also benefit the property market. The general feeling of the Brexit deal is that it is unlikely to influence the property market unless there is damage to the economy.
Conclusion: Although there is still uncertainty about the future, prediction is that the property market will continue to do well. The demand has exceeded the supply, which, in turn, will cause the housing market to remain at a high.