Predictions – 2021 Property Market
We are naturally concerned about the housing market and look ahead with cautious optimism.
Written by: Richard Antrobus Category: News December 13, 2020
In December, it is natural to look ahead to the New Year, and to predict what will happen in the areas that affect you. At vitalSpace, we are naturally concerned about the property market in the UK, and we are looking ahead with cautious optimism.
2020 has been a challenging year for everyone, but the property market is ending the year on a high. There will be fresh challenges to overcome next year, but a range of property market experts have shared their belief that prices will grow in the next 12 months.
What factors will influence the 2021 property market?
In looking to determine what shape the housing market will be in next year; we need to consider the factors which are likely to influence the 2021 housing market:
• The COVID-19 pandemic
• Brexit
• The overall economy
• An end to the stamp duty holiday
As of the second week of December 2020, the vaccine for COVID-19 is being rolled out across the country. This has created a sense of quiet optimism that by next summer, there will be a level of “normality”, or at least a movement away from the lockdowns of 2020.
It could be the most significant influencing factor on the 2021 housing market is Brexit and its impact on the economy.
Even as we move towards the middle of December, we are unsure of the form Brexit will take, and what deals will be in place. Therefore, it is impossible to state with any degree of certainty about how the market will perform.
One issue that will affect the property market is if the stamp duty holiday ends as scheduled on 31st March 2021. As of early December 2020, there are no plans to extend the stamp duty holiday. Given the demand for house moves and the backlog in the industry, this will affect the market.
Some buyers will miss out on the saving, which might lead to some deals collapsing. It would not be unreasonable to assume there will be a drop-off in demand for homes once the significant stamp duty holiday is no longer available.
What do leading property market organisations predict for 2021?
JLL think that there will be house price growth in 2021 and that the change will increase across 2022 and 2024. Their prediction for the 2021 market is for a level of 2% house price growth in 2021, rising to a level of 14.8% by 2024.
Knight Frank believe that the 2021 price growth will reach around 4%, but will drop to 3% between 2022 and 2024. The organisation predicts there will be a drop in house sales of approximately 15%. They also believe that while regional hubs will perform better than the capital in 2021, London will bounce back at a faster rate across 2022 and 2024.
Savills think that house prices will bounce back in 2021, to a level of 5%. They also believe there will be a more significant rise in 2022 before a “normal” rate of growth is present in 2023.
Savills have said; “Less exposure to the anticipated spike in unemployment is expected to support the market here and in London in the near term. However, we anticipate that this will be offset by the withdrawal of the stamp duty holiday after March 2021. In the same way that this has provided the greatest financial boost to buyers in these areas since its introduction, so it is likely to have the biggest dampening effect over the remainder of next year.”
At VitalSpace, we appreciate there is considerable uncertainty at these times, and our clients want clear guidance. We are more than happy to provide as much assistance and information as you needed. We can be contacted in many ways, which means you can connect with us from the comfort of your own home.
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