With a year like never before 2020 was a year that everyone had difficulty with. The housing market in particular was attacked with rising home prices, and endless bidding wars; these combined made buying a home feel impossible for potential homeowners.
Many potential buyers took the decision to wait out 2020, which at the time felt like the best solution. However towards the end of the year there had been a property boom, although this is ideal for the industry itself, we predict that this will continue, meaning it may begin to feel like there are less options.
Although there was an increase in property transactions towards the end of 2020, sales activity is expected to slow down throughout 2021. Not only that but the growth in house prices is also predicted to be slowed down as well. After taking into consideration many professionals' opinions on average the prices forecast to rise by 4% in 2021.
The impact of Brexit and COVID-19
It has been assured that Brexit will not affect the UK property as much as it was originally predicted too. The biggest pressure on the market is more likely to be job uncertainty. With the furlough scheme coming to an end in April many employees are unsure as to whether they will be able to return to work, this could result in a drop in transactions in the middle of 2021.
However, with both COVID-19 vaccines now working their way around the UK many people have been left feeling more positive that they will return to a “normal” life later on in 2021. The increase in vaccines results in an increase in confidence to the wider economy as well as the property market.
In recent months the demand for moving house is at an all time high, this has led to a record number of property transactions. The recent lockdowns have resulted in many homebuyers and tenants re-evaluating their home priorities.
After spending the majority of 2020 at home, people began to feel like their homes were unsuitable for this new lifestyle, this led to tenants and buyers looking into homes that offer more space and have a better internet connectivity. With this in mind, the stamp duty holiday is approaching its deadline and so these two factors will likely fuel the demand throughout the first few months of 2021.
Mortgage Rates and availability
With there being a very small chance that the Bank of Englas increases the base interest rate in the short-tem, mortgage rates are expected to stay down, this makes 2021 an ideal time financially to purchase a property.
In addition to this banks are beginning to gain more confidence in lending money and this will continue the more we begin to return to normality. This will therefore increase the availability of mortgage products and so will be positive news for homebuyers and investors who are seeking mortgages.
Although 2021 continues to present us with uncertainties, the UK property market will continue to stay resilient throughout. With this in mind it could work out to be the best time to purchase a property, with low mortgage rates and slow rising house prices, it could provide an ideal time.
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