The current state of the property market
Since July of 2020 the property market has been steadily rising, despite lockdown measures, furlough and economic uncertainty. This unexpected rise has been largely accredited to the government’s temporary stamp duty ‘holiday.’
Here in Wales, this property tax is referred to as land transaction tax (LTT), and much like England’s ‘stamp duty,’ this tax has also been temporarily cut.
LTT in Wales is now at a 0% rate on properties up to the value of £250,000 until the 30th of June 2021. After this period, it is expected that LTT will revert to its original rate of 0% on properties up to a value of £180,000.
Regardless of the economic instability and uncertainty encountered in 2020, the year ended with UK house prices costing more than £14,000 more than the previous year. It is estimated that the average property costs a staggering £253,374 as of December 2020.
Predictions for 2021
As the property market’s rise has been largely attributed to the stamp duty and LTT ‘holiday,’ it is expected that prices could fall with the end of the ‘holiday’ on June 30th.
Halifax has predicted that the economic fall inflicted by the pandemic should catch-up with the property market in 2021. They predict a fall in property prices of between 2% and 5%. It is their belief that the impact of the COVID-19 pandemic on household finances has been delayed to government relief such as the furlough scheme.
However, while this upcoming year might prove to be a challenging one for the housing market, we can expect to see a continued increase in demand for certain types of homes.
Social distancing measures has seen an increasing number of employers instructing their workforce to work from home. This, in turn, has led to a rising demand for space, and the search for larger properties offering office or garden space is growing. The market is also seeing searches in rural locations increasing as the need to be within commuting distance of the workplace has been eliminated.
Rightmove has described January 2021 as their busiest start to a year, they report site visits are up by 30% compared to the same time last year.
What about coronavirus?
Whilst the coronavirus pandemic has inflicted a sense of doubt and uncertainty on people’s lives, livelihoods and the economy, the property market remains open.
The current government regulations do not prevent you from buying, selling or renting properties.
It is predicted the property market and consumer confidence will continue to grow, parallel with the nationwide vaccine roll-out. It is expected that the market will gain pace as a return to normality appears within reach.
What about Brexit?
It’s impossible to predict the impact Britain’s exit from the European Union will have on the property market.
Some people predict Brexit will have a negative impact on Britain’s economic recovery from the coronavirus pandemic. However, others believe Brexit will bring new economic opportunities.
Will the value of my house increase in 2021?
House prices are continuing to grow fuelled by the current stamp duty/land tax ‘holiday’ and buyer demand for properties offering increased outdoor and indoor space.
However, this increase in the amount of property buyers is not the only determining factor in the rise of house prices. Property prices can also rise if there aren’t enough sellers to satisfy this increase in demand.
Recent figures state that there are 13% less properties on the market than there are buyers. These leaves properties in high demand and presents a perfect condition for rising house prices.
Should I sell my house in 2021?
Despite the uncertainty and devastation brought on by the coronavirus pandemic, 2020 and 2021 are actually proving to be a promising time for property sales.
If you choose to sell your house in 2021, the following should work in your favour:
More buyers than sellers – As previously mentioned, the current property market is experiencing high buyer demand with fewer properties on the market. These are great conditions for achieving a high sale price for your home.
Land tax ‘holiday’ – Another contributing factor is the current land tax ‘holiday,’ induced by the coronavirus pandemic. This holiday is set to end on 30th June 2021 and many buyers are attempting to secure quick sale and take advantage of this.
Your personal motivations – You should also be mindful of your personal motivations when deciding whether to sell your house. If your personal
circumstances have changed you might be left with little choice when deciding whether to sell your property. Whether you’ve outgrown your current home, you’re relocating with a career change, or any other motivating factors.
It’s worth remembering, that whilst selling on the current property market can be highly appealing, what we can’t be sure of is what will happen in the future. The end of the land tax holiday, Brexit transitional period and the full economic impact of the coronavirus pandemic could all impact the property market significantly. Which means choosing to sell your home later in 2021 could be a risky decision.
That being said, if you’re thinking of profiting from these current conditions it is best to list your property sooner rather than later.
Mr Homes have years of experiencing securing the best sale price for properties in and around Cardiff. Whether you’re looking to take your next step on the property ladder, sell one of your investment properties or simply curious to find out how much the market has changed in your area, then book your free valuation with us today.