Market update - January 2021
It’s nearly Spring (as I write this it’s freezing cold and pouring with rain). The kids will be back at school soon (they’re currently shouting at each other downstairs), and the UK is on the verge of approving its fourth Covid vaccine. Novavax is showing nearly 90% efficacy and the UK government has secured 60 million doses.
So, thoroughly re-assured that the light at the end of the tunnel isn’t a train, I thought it might be a good time to look forward to what the property market might have in store in 2021.
2020 was a remarkable year for the market. According to Savills, it was the first time in modern history that both house prices and activity rose during a recessionary period. According to the official UK House Price Index (using data from the Land Registry and the ONS), the UK’s average house price surged by 7.6% in the year to November 2020, the highest annual growth rate the UK has seen since 2016.
In London, price growth was over 4% for homes with medium or large gardens, while those with no outside space fell by -0.7% over the same period. Unsurprisingly, both country and coastal homes were up by 5%.
In terms of transactions, sales volumes ended the year 11% down, mostly due to the eight week shutdown of the property market. Whilst the figure is significant, it’s less so when compared to the financial meltdown of 2008, when sales volumes fell by an incredible 43%.
So what of 2021?
According to Zoopla, 12% fewer properties were put up for sale in the opening weeks of 2021 compared to the same period in 2020. Meanwhile, Zoopla’s own measure of demand has picked up by 13% year on year.
The Stamp Duty Holiday is ending in March, and as of April there will be a 2% SDLT surcharge for foreign buyers.
It will be interesting to see how this affects the prime central London market. Here prices fell 0.4% over the course of 2020, and more strikingly are down nearly 21% since the 2014 peak. The amount of prime central London properties coming to the market in January was 51% higher than the previous year.
One has to wonder how a combination of higher taxes, increased development and falling prices will impact this market. I imagine that it might be looking pretty attractive, particularly for Dollar based buyers.
And what of everyone else? If you’re looking to move this Spring, I suspect you will be doing so in a competitive market, whether you’re buying or selling. Demand is still likely to outstrip supply, but there will be considerably more properties coming to market once the weather improves, schools are back and a greater percentage of the population have been vaccinated.
In the meantime (and at the risk of repeating myself) please use this time to get organised, whether you’re planning on selling or buying. You can read more on this here.
Things I’ve been paying attention to, watching or reading this week
The 27th of January was Holocaust Memorial Day in the UK.
In 2013 the broadcaster Alan Yentob made an equally moving and inspiring film about the life and work of author Judith Kerr, as part of the 'Imagine' series.
Towards the end of the programme Kerr turns to Yentob and referring to the millions who had died, says, “In a way I feel that we owe it to them to achieve something with our lives”.
It’s a thought which has stayed with me since I first watched it in 2013.
You can watch the full programme here - https://www.youtube.com/watch?v=L_C4spgYQEE