Buckle up and knuckle down: If you think 2020 has been a wild ride for the housing market, just wait until 2021
Few would have predicted that in a year when a pandemic swept the world, the UK housing market would be riding high.
House prices rose 7.6 per cent to an all- time high average of £253,243, says the Halifax.
The 121,740 properties sold in October alone – the latest data – were a whopping 14 per cent up on a year earlier, according to HM Revenue & Customs.
Property predictions: After a roller-coaster 2020, our experts predict ten trends for the next 12 months
And Government figures show even rents hit an all-time high of £725 per month in England and £1,435 in London.
A stamp duty holiday until March has encouraged a frenzy of buying as people bag savings of up to £15,000, while interest rates remain near record low levels and a ban on tenant evictions until mid-January may be hiding a mountain of rent arrears.
We defer to the experts, who predict ten trends for the next 12 months.
PRICE LOTTERY
The jury is out. Rightmove forecasts a 4 per cent rise with director Tim Bannister saying: ‘There’s likely to be a lull in quarter two unless the stamp duty holiday is extended, but for many its removal will not be make or break, though it may lead them to reduce their offers.’
At the other end of the scale, the Centre for Economics and Business Research warns of a massive slump and a 14 per cent price crash in 2021. Most other analysts suggest a tiny rise of just 1 or 2 per cent.
STAMP DUTY RACE
If you don’t complete your purchase by March 31, you will pay as much as £15,000 more in stamp duty.
It’s predicted that hundreds of thousands of buyers may have their deals delayed by a backlog hitting mortgage lenders, council planners and conveyancers working more slowly because of Covid and furlough.
‘Consumers must recognise it’s increasingly unlikely that if they buy or sell now, they will complete by the deadline,’ warns president of The Law Society, David Greene.
TAX BOMBSHELL
There’s speculation Chancellor Rishi Sunak will adopt calls from the independent Office for Tax Simplification and The Social Market Foundation to increase capital gains tax on profits made by sellers of holiday homes and buy-to-lets – or it could even be extended to profits from sales of main houses, too, despite protestations from Sunak’s own party.
Estate agent agency Knight Frank reports more interest in London homes (pictured) in November and December than any time since March
FIRST TIME BUYERS
Help To Buy has already aided 270,000 people into home ownership: buyers borrow 20 per cent of the purchase price interest-free for the first five years with just a 5 per cent deposit.
But the scheme changes in April, after which only first-time buyers are eligible.
‘We’re pleased we can help buyers with smaller deposits to own a home at a time when there are fewer options open to them,’ explains Will German, of government body Homes England.
LONDON RENAISSANCE
If the Covid vaccine rolls out as scheduled, agents expect the exodus of buyers from cities to country will slow.
‘London will become party-central and those who endured a winter of deep mud and dark skies will be anxious to return to the safety of pavements and street lights,’ says Sara Ransom of Stacks Property Search, a buying agency.
There are signs already — agency Knight Frank reports more interest in London homes in November and December than any time since March.
RENTALS ROLL ON
One-in-seven homes sold in November were snapped up by landlords, says estate agency Hamptons, with the Midlands and the north of England most popular as they provide the best returns for investors.
The proportion of households privately renting is set to expand from its current 20 per cent, while a new Renters’ Reform Bill is expected to become law in 2021 making it harder for tenants to be evicted.
WALLS ARE BACK
Open-plan living is going out of fashion. John Lewis says buyers and renters, having been at home more than usual during Covid, want to segregate work areas from leisure. Home owners plan to spend £5,000 as a direct result of ideas they came up with during lockdown.
WORKING FROM HOME
A survey of 1,000 firms by the Institute of Directors shows 74 per cent will continue with some form of working from home in 2021.
‘It’s been one of the most tangible impacts of coronavirus on the economy. For many, it could be here to stay,’ says IoD policy director Roger Barker. It’s given rise to a new room – the ‘cloffice’ – an office in a closet.
ZOOM WITH A VIEW
A growing fashion in the U.S. is to download luxury mansion backgrounds for the purpose of using Zoom. That can mean country house libraries or floor-to-ceiling windows overlooking downtown Manhattan. Best of all, they’re free.
HELP FOR HOUSE HUNTERS
The brothers who founded Purplebricks – Michael and Kenny Bruce – are launching a new sales website called Boomin to compete with Rightmove. A multi-million pound marketing blitz starts next month.
Will it become the go-to website for house hunters?
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