The budget has been announced.
Two weeks ago, we wrote an article about the uncertain property marketing moving forwards into 2021, with a brief look at 2020 where trends and predictions were almost impossible.
>We attempted to focus in on the four major factors that the property market in 2021 would depend on, which were:
- How quickly the government can get those who need it vaccinated.
- How quickly the government can end lockdowns.
- How people will feel spending after furlough.
- If there will be a stamp duty holiday extension.
There have no been two major changes for two of these major factors, stamp duty and furlough, but not only this, there has been an unexpected and significant “government guarantee”.
Lockdowns contributed towards the 2020 property market being completely erratic and unpredictable, with bursts of active buyers rushing to take advantage of the stamp duty holiday, whilst being supported by furlough, but also with cautious sellers, meaning that demand far outweighed supply.
However, the immense activity ended with 2020 boasting the highest average house price rise in six years, by a whopping 7.3%, however, because of the tier style lockdowns introduced later, this rise was very uneven across the country.The 2021 property market was reassured somewhat by the Governments announcement last week, about their finally being a roadmap of sorts out of these lockdowns, however, buyers and sellers were still waiting with bated breath for the budget.
With the budget now announced, the stamp duty holiday has been extended until the end of June, to help overcome what we previously mentioned in our article two weeks ago, there has been a manic rush for completions that just will not happen before the original April deadline.
However, this extension will probably just cause another manic rush in June, but, this also means that we can expect another boost of buyers between now and then, which will be helped by Furlough being extended until September.
Reading through social media, it’s clear that Furlough is having an interesting affect on people, creative a clear divide in opinion. On one hand, you can find those who are reassured by furlough, which will have a positive impact on the property market, however, on the other hand you can find an equal amount of people who feel that furlough brings with it the uncertainty of more lockdowns.
At Robinson David Estate Agents, we have been giving this a lot of thought, and have come to the conclusion that as furlough now brings with it a certain amount of skepticism, even though it made an impact during 2020, the impact of furlough on the 2021 property market may not be as significant.
But, the stamp duty holiday extension, furlough, and talk of a roadmap out of lockdowns combined, suggests enough confidence that, at the moment, we can predict to expect a continued bustling, and much less erratic than throughout 2020, property market moving forwards into the last quarter of 2021, with a wave of panic building in May and throughout June.
The unexpected cherry on top is that from April, an unexpected and significant government guarantee of 95% mortgages will be available, with the intention of helping those renting onto the property ladder, turning “generation rent” into “generation buy”, however, not only first time buyers have access to the 95% mortgage guarantee, it’s available for properties priced up to £600,000!
Not just anyone with a 5% deposit will be able to take out these mortgages though. Homebuyers must prove that they can comfortably afford the monthly repayments after other essential spending has been covered. The Unbiased Mortgage Calculator may be useful here.
With the furlough extension, the stamp duty holiday extension, a roadmap out of lockdowns and now only 5% deposits, the property market really is receiving a quadruple dose of encouragement to keep it buoyant throughout 2021, which should be enough to coax the nervous 2020 sellers holding back, to pick up the phone to their desired agent, filling the supply gap for buyers.