Whilst the rest of the world has been focussing on the COVID19 pandemic, questioning whether a New Normal is needed for society to live by, the United Kingdom has also had to focus on another grey cloud, called BREXIT. These two enormous economy shaking beasts created a rollercoaster ride for the UK property market and estate agents.
Despite what any official body would report throughout 2020, it was understandably almost completely impossible for any estate agent to predict how the property market would fare from one month to the next month.
However, here we sit in 2021 and, for better or for worse, the uncertainties of BREXIT are firmly behind us, whilst at the same time we can all rejoice in the good news that those who need vaccinations, should now be able to receive them before this coming summer, which is a quicker distribution than any other European country.
Finally, we can all have at least a little sigh of relief at this new positivity.
"This is all lovely, but what does this all mean for the UK property market now?" - I hear you shouting.
Before sharing the feelings of Robinson David Estate Agents on the current property market, we first need a brief peek across the past twelve months.
2020 began with a surge of property movement throughout the UK, however, quickly slowed for the first lockdown. But during this first lockdown a pent up surge of buyers were impatiently waiting, which only grew ever stronger at the governments announcement of a stamp duty holiday in June. This surge of activity within the property market took observers aback.
It seemed that the stamp duty holiday is the one thing that the British were not willing to let COVID19 get in the way of.
This volatile stop/start property market continued to create pockets of pent up energy, which then exploded after each lockdown throughout 2020. Because of COVID19, many put their plans to buy or sell on hold and at one point, transactions were 18% lower than 2019, and throughout the year, demand massively outweighed supply, but by December 2020 after each post lockdown explosion, active, quality, no messing buyers and sellers had heightened the average house price by a whopping and unexpected 7.3% than in March 2020, the highest rise in six years!
This increase initially sounds like good news for the UK property market, but here is where the unpredictability begins to set in deeper. Even though the UK ended 7.3% higher, the tier style lockdowns introduced by government made this house price rise completely uneven throughout the entire country, with some areas faring significantly better than others.
In Gloucestershire, an area that Robinson David Estate Agents covers, two towns were amongst the ten locations in the United Kingdom that saw the highest price rises throughout 2020, which were Cheltenham and Cirencester.
What also helped this increase throughout 2020, is just how quickly agents, banks, brokers, insurers and solicitors all adapted to the pandemic and became much more cooperative with one another, which meant that a motivated seller or buyer found themselves within a newly oiled machine.
The property market in 2021, depends upon four major factors...
- 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.
Yes, the stamp duty holiday is due to end in March 2021, so currently there are predictable frantic rushes for completion before then, however, what isn’t predictable is the end of furlough, as well as the psychological effects of furlough.
Dominic Raab has just announced the extension of Furlough, again, which was due to end in April 2021 after the stamp duty break in March, to Summer 2021. For the property market you would think this is good, but, at the same time it has lead many to speculate an unspoken intention of more lockdowns, which could make the cautious sellers and buyers from 2020, also be cautious throughout the first half of 2021, but this doesn’t seem to be the case just yet.
If we have more lockdowns, them we could just predict a similar market to 2020 during 2021, however, this could only ever be a post observation, as we just do not know if there will be more lockdowns. What Robinson David has seen throughout the beginning of 2021 so far, with the arrival of vaccines and the end of BREXIT, a hive of activity from those who were hesitant throughout 2020 has occurred.
The reasons for this activity can be heard by some Robinson David clients, where they just couldn’t hold their pent up desire any longer with stamp duty nearing an end. Some others clients felt safer now with the success of the United Kingdoms vaccine programme, and others are simply frustrated just wanting to move on with their life and live, not letting a virus get in the way of their dream property.
What’s very reassuring for 2021 is that the land registry has been open throughout the third lockdown, just like the previous two, and although working from home, they are ready and waiting. Lenders have also been open throughout, who are currently itching to lend.
In fact, lenders are now boasting that they can lend at a higher loan to value percent, where Nationwide, Santander and Halifax are the highest, where Halifax can lend at an impressive 85%.
Thinking rationally, we can probably surmise that there will be less lockdowns throughout 2021, which means that the year will be spent helping customers with pent up desire from 2020, rather than the short explosions after each lockdown. The UK market is also being heavily supported by freshly cooperative selling and buying processes.
This means that, at least until furlough ends, even with the uncertainty of further lockdowns, the outlook is ultimately good for the property market, where we can expect to see a levelling of prices, and much more supply to meet the overwhelming demand.
After years of BREXIT ending with a pandemic, the demand is there, you can literally feel the unspent energy surrounding the property market, and even with the activity now, at some point soon it’ll be like opening a floodgate.