14
Jan
Market Update - Wrapping up 2020, Opening 2021
2020 was peppered with numerous twists and turns with potential
disaster around the bend of each upcoming month, that soon turned
to each week as restrictions and new information began changing
rapidly. But through it all, the property market hasn’t done
too badly compared to other industries that were unfortunately hit
very hard.
Covid-19
Naturally disaster struck in more ways than one when Covid-19 began
spreading it’s girth globally. We went into a fully fledged
lockdown in March, and the property market as well as construction
was included in the halt. But as the market opened up again, we
were allowed to commence viewings and boom, the market took a quick
upturn. When the second and third national lockdowns hit, the
property industry was allowed to stay open. We could continue
viewings, construction could carry on and people could move home
providing they all stuck to government guidelines. As a result,
demand rose for sales throughout the year and it has been quoted by
ARLA that demand for housing was up by 55% compared to 2010.
Finance
To help this along, Chancellor Rishi Sunak announced a stamp duty
holiday in July 2020 which was a temporary relief due to end 31st
March 2021. There has been talk about extending the holiday but as
of writing, this hasn’t come to fruition and it has been
announced so far that the holiday won’t extend. But it had
the effect of boosting the sales market, with many people taking
advantage of it (rightly so). Another aspect adding to demand is
cheaper money, the Bank of England lowered its base rate to 0.1%.
Mortgage deals were good and approvals were also up. Mortgage
holidays were also brought in, while it affects ones credit score,
it is still a lifeline for those who needed it.
Lifestyle
Last year shone light on the way we live and work. With the stay at
home orders, people were working from home, some for the first
time. Offices closing meant a massive shift for many people and as
such, people considered the function of their homes more than ever.
A work space was needed, as well as relaxing spaces, and as a bonus
some outdoor space. Those with children at home saw the need for
more space whilst working from home. This drove the rising demand
for houses instead of flats, and a ‘London Exodus’.
People didn’t see the reason being in the city when they were
just stuck indoors at home working, and this was to be the norm for
the foreseeable future. The same could be done outside of the city
for far less money.
Rental Market
The rental market however is a different story and varies across
the country. We saw a drop in international and national students
who were moving away from home and those who did move, ended up
being locked in their rooms when national lockdowns hit. A number
of students went home and stayed there, but of course they were
still paying for accommodation, a very tricky situation to end up
in. As for the professional market, many lost their jobs and a very
large number went onto the furlough scheme. Some tenants used the
situation to avoid paying rent even if they had the money and other
tenants were truly hit hard by job loss. There was also an eviction
ban put into place, landlords couldn’t evict their tenants
unless under specific circumstances, and a 6 month eviction notice
rule was also put in place, valid until 31st March 2021.
2021
Without a crystal ball, predicting what will happen and the knock
on effects is near impossible but now in the throes of the third
lockdown, the industry is still open but there are signs coming of
potential disruption. Talks are in place for stopping property
viewings amidst rising case numbers; petitions are in place to
extend stamp duty holiday, but at the time of writing, government
has indicated this will not be extended; the eviction ban is coming
to an end, but may be extended to protect tenants; the students are
unlikely to come back this academic year; furlough ends in April,
will businesses and jobs be sustained after this; the vaccine is
being rolled out across the country restoring some confidence. The
tipping point is end of March, beginning of April, but things can
turn in dramatic enough fashion next week.