2020 has proved a testing year all round and no one could have predicted the implications the coronavirus pandemic would have on all aspects of our lives. That being said, no one could have predicted how well the UK property market would have weathered the storm.
Since the first UK lockdown back in March, the property market has seen both an increase of buyers and sellers as more and more people reevaluate what they need from their homes. With more people than ever working from home, as well as homeschooling their children, the need for extra space is soaring. And, with the Government’s period of stamp duty holiday, many have the financial tax incentive to make their move. For property investors and developers alike, demand for their renovations went sky high.
On the run-up to Christmas, property sales were expected to continue on this upward trend; however, the trend is looking to slow down when it comes to predicting the market next year.
So what factors can affect the UK property market in 2021?
The Royal Institution of Chartered Surveyors (RICS) have comments on the recent surge in buyers and sellers looking to cash in on the temporary stamp duty holiday; but, due to the end of the tax-relief looming in March, RICS has found signs to suggest the market is losing momentum.
RICS has also predicted that, despite the slowdown, they are not expected to see a significant fall in property prices. Enquires from new buyers and sales have been on the rise in most areas of the UK, with Wales and Northern Ireland seeing particularly strong growth in November (Office for National Statistics, HM Land Registry). For January, at least, these figures are expected to level off. In regard to how the market will fair further in the new year, unfortunately, it is too early to say with any certainty, but the market is looking likely to continue slowing down.
With reduced government support and an expected increase in unemployment due to redundancy programmes, a sharp decline in the property market could be on the cards. Although, if the UK property market can surprise us during the first lockdown, perhaps 2021 may also surprise us later on in the year.
It is possible that sales may reduce, but as more key workers are required to help combat the resign case numbers around the country, HMO’s and the rental market may see more movement. For the time being, we all just need to wait and see before a clearer picture can be predicted.