While no-one could argue it’s been an ideal start to the year, with a new national lockdown enforced to try and wrestle back control of the second wave of coronavirus, the fact that the property market has been allowed to remain open again – albeit with all the usual protocols still in place – is a cause for optimism.
Even more so at a time when activity and demand is expected to be even higher than normal. January is typically one of the busiest times of the year for the property market, as the Christmas boom in property searching coupled with people reviewing their lives at the beginning of a new year combine to boost market activity.
Last year, the decisive result in the general election of December 2019 meant the first few months of 2020 saw what was known as the ‘Boris bounce’, with buyers and sellers finally given the certainty and stability they craved after years of impasse.
This year, the fresh lockdown – causing people to once again review their living arrangements and their lifestyles – and the impending stamp duty holiday deadline – is expected to supercharge demand and activity up until March 31 2021.
Below, we lay out some of the projections for the year ahead.
A logjam of transactions
According to Rightmove, the UK’s leading property portal, there is currently a logjam of 650,000 properties changing hands, which means the first quarter of this year is expected to continue the momentum that the market has seen pretty much since it reopened in mid-May last year.
With buyers and sellers warned to act fast to take advantage of stamp duty savings – Zoopla has previously said that only half of all sales agreed in January will complete in time before the deadline – the number of transactions being pushed through is only likely to rise.
This is good news all round. For sellers, increased demand is likely to improve your chances of selling quickly and for the best possible price, as you have a larger pool of buyers to target your home towards.
For buyers, conditions remain strong thanks to the possible savings on stamp duty, record low interest rates and a competitive mortgage market.
House prices set to rise
Although property experts are split on the extent to which they will rise, most predict house price growth in 2021.
Rightmove is the most optimistic, expecting house prices to rise 4% this year thanks to more pent-up demand, the stamp duty holiday and the sheer number of transactions making their way through the system.
Zoopla is more reserved, believing prices at the end of the year will be only 1% higher than the start, with a fall away in transactions once the stamp duty holiday ends. But this assumes there will be no extension to the holiday, which is something that still can’t be ruled out completely.
The government has so far been firm in its assertion that the holiday was a temporary measure and will end, as planned, on March 31, but there has been huge and growing pressure on Chancellor Rishi Sunak to change tack.
Even if an extension is out of the question, a tapering off – to avoid a sudden halt to a number of transactions – could be introduced.
Global property firm Knight Frank, meanwhile, believes house price growth will be more modest and subdued in 2021 (up by 1%), before accelerating again in 2022 (up 3%).
While predictions are useful, and help to give an indication of where they market might go, they are far from an exact science, and it’s important to bear in mind the situation in 2020.
Despite the huge challenges and obstacles of the pandemic, the property market had one of its most successful years, batting off fears of a house price crash or market collapse to report record highs in prices, mortgage activity and demand.
By September, the market was steaming ahead at its fastest pace since 2016. In December, prices were 5.3% up on the level seen in March, when the Covid-19 pandemic first struck, according to Nationwide.
No-one could have predicted the pandemic, but equally no-one could have predicted the remarkable reaction to it, as the property market recovered incredibly well.
The fundamentals of the market remain strong, which should help to keep things robust and solid, while the vaccine rollout and the continued opening of the market should help to keep sentiment high despite the new lockdown.
A change in emphasis for commuter towns
For many years, Maidstone – the area in which we at Knight Edmonds operate in – has been one of the UK’s most popular commuter towns, with people living in Maidstone and taking advantage of the fast transport links to London to work in the capital.
However, like other commuter towns where a big part of the population went elsewhere during the week for work, Maidstone has had to adapt and evolve as a big chunk of the country has been working from home most of the time since March last year.
Now the advice again is to work from home if you can, and the parks, green spaces and canalside walks of Maidstone will once more become popular with walkers, cyclers and runners getting their exercise fix during lockdown.
While Maidstone continues to be a key commuter link to the capital, this might lessen in importance as people work from home more permanently or on a flexible basis.
People are now realising what they have on their doorstep, and once things open back up again, Maidstone has plenty of bars, cafes, restaurants, shops, leisure venues and entertainment complexes to keep people happy. It also has relatively easy access to the Kent coast and lovely North Downs countryside.
The green space on offer – now such a priority for people, and in particular buyers – is one of Maidstone’s main draws, with Mote Park, Vinters Park and Whatman Park all in and around the town.
Maidstone is, of course, the county town of Kent, and has long been more than just a commuter town – with centuries of history to fall back on – but with the changes in lifestyles triggered by the pandemic, with more people keeping it local and Londoners seeking out smaller towns and cities with easier access to green space, there is every chance that Maidstone will benefit more than most from this ripple effect.
Here at Knight Edmonds, we can provide you with all the advice you need on buying and selling properties in 2021 – in what is still the new normal. You can get in touch with our expert team today on 01622 291 491 or firstname.lastname@example.org.
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