Episode 6: After the whirlwind of 2020, what does the 2021 property market hold in store?


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James Fisher – Property & News Editor at Country Life

Guy Robinson – Head of Residential Agency for Strutt & Parker

Louis Harding – Head of London Residential Agency for Strutt & Parker

Vanessa Hale – Head of Residential Research & Insights for Strutt & Parker

In this sixth and final episode of the first ‘Be:InSPired’ podcast series in association with Country Life, Strutt & Parker takes a look back over what has been happening in the property market throughout 2020, and a look towards the next chapter of 2021 and what it might hold in store.

There is no doubt that 2020 has been an astounding year for the residential UK property market. In a typical year, around 500,000 property transactions would have been reported to have taken place between January and the end of September in the UK. So far this year, over 300,000 transactions have been reported during this period, despite the market being closed down for nearly three months during the spring.

In Prime Central London, around 600 transactions would usually happen during this same Q1-Q3 period and the current figures show that just under 500 homes have been sold, highlighting how well this high-value part of the market has rebounded over the summer.

In the wider regional UK market outside London, Strutt & Parker reports that activity in November has been at the highest level it has been for six years (for the corresponding time of year). Momentum has been staggering, coming not just from pent-up demand but from many homebuyers seeking a lifestyle change, looking for larger properties outside towns and cities with more space, both inside and outside. The pandemic seems to have accelerated a natural change in society, but it remains to be seen whether habits have been permanently changed by the events of 2020. Our cities remain highly desirable and 2021 may well see the return of the suburbs.

Despite the frenzied activity of the property market seen this year so far, it is clear there are many headwinds to face over the coming months, which could have a significant impact on the UK housing market in the medium term.

Brexit negotiations are on-going and UK unemployment is rising as a result of the COVID-19 crisis. The furlough scheme, which is currently supporting around 2.5 million people, is due to end on 31st March 2020. The tax freezes on Stamp Duty Land Tax in England (and the corresponding Land and Buildings Transaction Tax in Scotland and Land Transaction Tax in Wales), plus the current Help-to-Buy equity loan scheme, are also all set to expire at the end of March 2021. The opportunity to take a mortgage payment break is due to end in April 2021 and there is growing speculation over Capital Gains Tax changes that could be made by the Chancellor in 2021.

With so many of these measures that have been stimulating the property market drawing to a close, 2021 is a difficult year to predict and there will be many hurdles to jump over. Nevertheless, Strutt & Parker is forecasting a positive outlook for property values over the next five years. While the firm expects prices to remain fairly secure and stable throughout 2021, it predicts that house prices are likely to rise by 15% to 25% between now and the end of 2024.

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