1. House prices
The government hasn’t yet approved an extension to the stamp duty holiday so houses that go under offer now are not likely to benefit from the tax relief. With this in mind we’ve already seen a slight correction in prices as sellers no longer factor in the saving. Couple this with the end of furlough and the reality of the economic impact of the virus we might even see another correction in Q3 as people default on mortgages. This will be most relevant in London but will be seen across the country.
Halifax, the UK’s largest mortgage lender predicts a 5% fall this year although we predict that many places will be largely unaffected especially where there are strong transport links and good amenities close to nature.
2. Location
There has been talk of an exodus from the cities but we predict it won’t be as pronounced as some are suggesting. Many families and young people will want to stay close to their friends, family and community and still value what the big cities have to offer. Big gardens or houses close to parks will benefit from this sentiment.
Outside the cities large plots of land with space to build home offices and sheds will also increase in value as the pandemic has given people a new focus on improved quality of life and with increased distance working.
3. Renting
As Brexit makes it harder for migrants to claim settled status, and the government offering financial incentives to EU Nationals to leave the country, rental prices will continue to drop.
In places like London where there has been a serious lack of stock for many years, this will ease the burden on the rental market and help renters have more choice in the short to mid term. Though we expect the city to return to its former glory within two years.
If you are a landlord or looking to buy-to-let, this means you could be at risk of void periods this year and rental prices will stagnate. We advise you to ensure your contracts are 18 months minimum and try to have end of tenancy dates at busy times such as spring or summer. We also advise you take the opportunity to update the property to make it more desirable in a competitive market.
4. Stock
The PM has pledged to build more housing with fewer restrictions on new builds across the country increasing sales and rental stock in the coming years.
Many older new-build flats are no longer cladding compliant and going through expensive refurbishments. This means that new-builds going up this year onwards will be more immediately desirable as they won’t have any cladding safety issues.
5. Build to rent
We’re seeing more developers favouring build to rent option, rather than build to sell. It’s a growing consumer trend too as people seek more luxurious offering with built in benefits such as concierge services and on-site gym and spa.
If you are unsure whether now is a good time to buy a property, this may be a good option for you in the medium term to wait and see what happens with the economic situation. Plus there is no responsibility for repairs!
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