Who could have predicted the happenings of 2020? It was all set up to be a fantastic year, the General Election had delivered a confidence boosting result and the previous years of Brexit uncertainty were nearing an end.
The property market was set for some plain sailing, with a lot of buyers frustrated with the lack of good properties coming for sale through 2018 and 2019. The pent-up demand was building.
COVID-19 and the first lockdown was a nerve-racking period as the industry sat on its hands waiting to see what would happen. Very few predicted that after a 30% stock market crash and a likely global recession that the market would bounce back by 10% when it reopened in May. A series of high value properties sold in competition through June and July as the most financially mobile buyers moved ahead of the rush.
Buyers in the more mainstream market now focused on more square footage, green space and the ability to work from home. Upsizing for more bedroom space, a balcony to a garden, a move from London to the Country, without the shackles of the daily commute are all fuelled by record low interest rates and a stamp duty holiday.
Transactions at the lower end have followed suit and while the conveyancing process has proved slow and the mortgage industry has struggled to keep up, the demand still remains. As we entered our second lockdown some of the selling agents are reporting record years and upward pressure on prices.
As an industry we are now looking ahead to 2021. A vaccine has been announced, creating a huge amount of positivity. There is no doubt that the property market is driven by sentiment. When the vaccine is distributed, there is hope that life could return to normal. We are confident that a lack of supply and an enduring demand will keep prices at least at the level they are today.
There are threats to this activity, including the wider damage to the economy, specifically the hospitality and travel sectors, with the inevitable ensuing unemployment. Removing the plaster of the furlough schemes and of course the end of the stamp duty holiday will also hurt. However, an active property market is good for the economy and the exchequer, so we are expecting some continued support from Rishi’s financial stimuli, to keep the market active, particularly focused on the lower end.
We are expecting some continued support from Rishi’s financial stimuli, to keep the market active, particularly focused on the lower end.
At the top end, both Savills and Knight Frank are reporting strong activity at the Super Prime end of the market, with a number of deals going through between £20-40 million. These transactions are without the added demand from foreign buyers who could add another layer, as and when they can visit the UK.
As a business, we are receiving an unprecedented level of enquiries from potential clients looking to move both within London and out to the countryside. All strong signs that the market will remain active in early 2021.
For those thinking of selling, doing so early in the new year would be a good time. Our advice is to speak to two or three selling agents over the next few weeks to understand how best to proceed in the new year and how to reach all the buyers still actively looking.
For buyers we suggested getting all your ducks in a row so you can hit the ground running and get ahead of the competition in early 2021. Do your homework on your ideal area of search, be decisive on schooling if that’s important to you, engage with a good mortgage broker so you have confidence on your budget and, if you want early access to the best properties, engage the services of a property buying agent.
George is a partner with JMChase Property Search, a private client property advisor. He is a qualified Chartered Surveyor and his property career spans 20 years mainly as a Partner with Strutt & Parker in Newbury, Winchester and London. George joined JMChase to head up the Country House team working across Hampshire, West Berkshire and Wiltshire.
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Illustration by Adi Kuznicki