It is fair to say that the property industry is looking to 2021 with much more trepidation than any year before. Because put plainly, 2020 has been weird. While the UK economy has seen a contraction in activity not seen for nearly three centuries, the sales and lettings market has roared as if it was the ‘loadsadosh’ 1980s.
While many of the agents The Negotiator spoke to over the past year have been bewildered and overjoyed (often at the same time) about a housing market in overdrive, nevertheless unemployment and business failures have been climbing and will continue to do so next year.
Industry tech and business consultant Mike Day recently pointed out that this parallel housing universe has been created by a majority of the job losses being among low-paid, young renters rather than homeowners.
Landlords have soaked up most of this economic shock, either writing off or deferring rent arrears rather than sling tenants out.
But the questions is will the end of furlough, the Stamp Duty holiday and a long wait for a vaccine lead to a deeper downturn that begins to reduce volume in the sale market?
Isabelle Branson, Head of Sales at Carter Jonas Wandsworth
Electric charging points to become essential
“I had a couple from Fulham, with babe in arms, pull up outside a beautiful Arts & Crafts home in Magdalen Conservation Area near Wandsworth Common in their hybrid car and on the street was an electric charging port. It was like fate had taken its course and they put in a well above asking price that day on their dream home.”
James Hyman, Head of residential at Cluttons
Rishi will modify the Stamp Duty holiday deadline
“We believe that Rishi has no option other than to extend the deadline in line with the minimum period of the various lockdowns, which have undoubtedly slowed down the selling/buying process.”
Jeremy Leaf, North London agent
Market will soften
“At the moment we have no real reason to suspect that the market will not be fairly robust in 2021, although prices are likely to be softer and transactions lower as buyers and sellers react to worsening economic news and particularly inevitable higher unemployment.”
Dominic Agace, CEO, Winkworth
Momentum will continue
“While we expect there to be a softening of the market for flats after the end of the Stamp Duty holiday, the indications are that momentum will continue as, indeed, it was before the incentive was created.
“We expect a balance to remain between supply and demand and, with an economy still recovering from Covid, we envisage that prices will remain static as buyers refuse to pay premiums, reflecting continued uncertainty.”
Craig Reynolds, Owner of Urban & Rural in Bed/Bucks
Brexit will be a factor
“From a confidence standpoint alone, I think no deal will reduce the number of people prepared to commit to further borrowing or upward moves, certainly until we are six to nine months into the new normal. With a deal I expect it might be similar to business as usual.”
Mark Peck, Director, Cheffins
Stamp Duty deadline will impact until summer
“What we really need to know is the Chancellor’s plans for the Stamp Duty break from April onwards, should the tax break be slowly eased, we expect that 2021 will also see a busy summer, however in the case that Stamp Duty should return to its previous levels, we could experience a drop in property sales, particularly if buyers look to renegotiate on purchase prices to cover the tax bill.”
Nick Leeming, Jackson-Stops
Upmarket buyers will be more demanding
“Jackson-Stops expects vendors and agents who are looking to sell properties priced at £1.5 million or higher will need to price their homes competitively next year as buyers become less compromising on their property wish-list. “Branches from across the Group have seen a shift in buyer behaviour at this level, with many house hunters holding more exacting preferences than ever before.”
Becky Munday, MD, Munday’s Estate Agents
Family homes with offices will be red hot
“Here in South London, the majority of our clients are expecting babies – they are starting to extend their families and are looking for larger homes to accommodate this, so we expect huge traction in the family housing market. Working from home is becoming the norm so obviously homes that accommodate this are going to be popular too.”
With an economy still recovering from Covid, we envisage that prices will remain static as buyers refuse to pay premiums, reflecting continued uncertainty.
Ben Ridgway, Iamproperty’s Group MD
Virtual viewings are here to stay
“I’d expect to see a shift in consumer behaviour from pre-Covid times, with people more open to doing things virtually.
“There’ll be increased reliance on video tours, images and floor plans to make shortlists at home, with prospective buyers viewing fewer properties in person and an increase in demand for virtual viewings. More offers will be made without second viewings, and there’ll be an increase in buyers purchasing ‘blind’, having seen information online only.”
Richard Adamson, Partner and auctioneer at Allsop
It won’t all be about Stamp Duty
“The trajectory of the residential property market in 2021 will be determined by wider economic factors, rather than the Stamp Duty holiday coming to an end.
“It is quite possible that the Government may extend this incentive, but given how well the property market has performed, they may want to end it to get some well-needed tax in.”
Matthew Pratt, CEO of Redrow
Office space and broadband will be home must-haves
“There has been resolute demand for homes with more space to live and work as customers reflect on their lockdown experiences.
“We are also now more reliant than ever on broadband and along with water, gas and electricity, strong internet connection is now seen as the fourth utility. For many this year, a robust connection has been the only way to maintain both their professional careers and social entertainment and poor access can be frustrating, impact quality of life and even lead to isolation and loneliness.”
Jim Wood, Managing Director at Barratt London
Spring market will be crucial
“The crucial period in 2021 will be the Spring where we will see the stamp duty holiday which has supported the housing market through the Covid pandemic come to an end on top of the phasing out of the current Help to Buy scheme.
“With Help to Buy eligible properties around the country now fall under a lower price bracket, however, London’s cap remains at £600,000, so we may see a boost to the first time buyer market in the capital.”
Santhosh Gowda Chairman of Strawberry Star
First half of 2021 will be weaker
“Moving in to 2021, we expect demand in the housing sector to be stable but below pre-Covid levels, at least for the first six months.
“The UK housing market has remained resilient throughout various global upheavals and overall, the story has only been positive when you take a five to 10-year view.”
THE HOME FINDERS
Sara Ransom, Stacks Property Search
“There’s been a big surge in demand for swimming pools, from large basement pools, to tiny organic-looking plunge pools in small back gardens. Architects have been overrun with holiday-in-your-back-garden demand.”
Edward Heaton Founder, Heaton & Partners
Divorce and probate sales will rise!
“We are living in a world where there is going to be a significant economic price to pay for the seemingly limitless giveaways the Chancellor has made this year.
“Due to Covid and the lockdown, divorces are increasing and there will be a spike in probate sales, whilst others will have to sell because of financial stress.”
Richard Donnell, Zoopla
2021 will be 10 per cent below 2019 transactions
“The first quarter of 2021 is set to register a seasonal uplift in demand, so we expect this to be short-lived and for demand to weaken thereafter.
“Once the Stamp Duty holiday concludes at the end of March, we anticipate a slowdown in sales completions as the impetus to move amongst buyers motivated by Stamp Duty savings dissipates.
“This will have a knock on effect on transaction volumes in the second quarter of the year, which we expect to run 20-30 per cent below normal transaction levels as Stamp Duty is reintroduced, before recovering slightly and running 10 per cent below 2019 levels for the second half of the year.”
Tim Bannister, Rightmove’s Director of Property Data
Reduced offers if Stamp Duty deadline ‘cliff faces’.
“There’s likely to be a lull in quarter two unless the Stamp Duty holiday is extended, but for many buyers its removal will not be make or break, though may lead them to reduce their offers to a degree to compensate for the higher tax, and indeed many sellers may be prepared to help to mitigate their buyer’s financial loss.”