“The Stamp Duty holiday and other comprehensive government support measures have enabled the property market to stare down the pandemic, against all the odds,” says George Franks, co-founder of London estate agency Radstock Property. “We all know that a giant fiscal squeeze and rising unemployment are on the horizon but for now the success of the vaccination roll-out, new living requirements and exceptionally low mortgage rates have lit up the market. Even if the property market does start to cool down later in the year, an extreme lack of stock will prevent a material fall in values. In London, rising unemployment will potentially be less of an issue than in the rest of the country, as the capital’s jobs market is an ecosystem in itself. Overall, we continue to expect average house prices in 2021 to rise by 2% to 4% depending on property type and location.”
So whats next in 2022?
“Right now, there is a huge bottleneck in the property market, with large numbers of prospective buyers and not enough new stock, and this is really driving up house prices,” notes Rhys Schofield, managing director of Peak Mortgages & Protection. “The sheer volume of prospective buyers is partly due to the return of first time buyers, as securing a higher loan-to-value mortgage has got a lot easier over the past month or two. With the Stamp Duty cliff edge looming, the lack of stock may be because next time buyers have less of an incentive to move, which frees up starter homes. House builders also shifted the vast majority of their stock at the end of last year and have limited units available within the next six months. We’ve even had a client reserve a property through one of the bigger national housebuilders, which won’t actually be built until early 2022.”