Property Prices in 2021: My opinion has changed, here’s why (grab a coffee ☕)

I don’t think anyone expected property prices to rise 7.5% in 2020 during a global pandemic 🤯

Some ‘experts’ even predicted prices would fall 20% in 2020… how wrong were they!

At Power Bespoke, we have certainly seen unprecedented levels of buyer demand and viewing requests… far exceeding 2019 📈

I’ve described it in the past as a ‘tensioned elastic band’ and as soon as lockdown 1.0 was ‘relaxed’ for the property industry, it went crazy. I’m not even sure a stamp duty holiday was needed to kick start the market but that’s a whole different conversation!

In 2020, our incredible team agreed property sales on a total of £82,429,282 worth of property, that’s 344 families helped onto the next chapter of their lives (30% more than 2019), 5037 enquiries received from buyers and over 2000 ‘covid safe’ viewings carried out.

You can read the AWESOME TwentyCi Property & Homemover Report – The Pandemic Edition by clicking the link at the bottom. It’s a really interesting read, you may be surprised by some of the findings. Sales agreed in Q3 2020 are 53% higher than Q3 2019.

But was it a ‘propped up’ market? Propped up by stamp duty holidays & help to buy schemes?

Let’s talk 2021 and whether it’s likely to continue… You may be surprised…

Firstly, if you need any property help or advice this year (whether that be buying, selling, renting, letting, investing etc), you can schedule a call with one of our experienced agents who would love to help. Just click here to arrange a time & date: powerbespoke.co.uk/advice

What’s 100% certain is solicitors and mortgage companies were crippled at the end of 2020 struggling to keep up with the huge demand/backlog causing extra delays in the legal process. Transaction times are more like 3-4 months vs 2-3. Mortgage processing & valuation surveys that would normally take 5 work days were taking more like 3-4 weeks.

Solicitors are certainly still under pressure to hit the stamp duty holiday ending but lenders seem to have adapted with a mortgage valuation application, survey & offer being turned around in 4 days on one of my recent sales.

When it comes to predicting a market, I’m no expert. Even the experts aren’t experts at the moment! I’m pretty good at adapting to the market changes & advising clients but ‘calling it’ is virtually impossible.

That said, I do have my ‘go to’ sources (not The Daily Mail or John on Facebook 😉) and they’re predicting a flat, but positive, 2021 with 0% price growth (but no drops either!) and a 20.4% increase over the next 5 years (17% in the South East)

With recent information shared by Greg Cunnington, Director of Lender Relations at Alexander Hall, on an expert panel discussion I was kindly invited on to, I actually think we could see continued house price growth this year. More on that later!

My ‘go to’ sources are (links at bottom):

Savills
TwentyCi
IMLA (The Intermediary Mortgage Lenders Association)

*keep an eye on those sources, they really are brilliant.

Savills Property Market Research is one of the best in the industry and the reason I like them is because they are ‘balanced’. They’re not a newspaper with outrageous headlines to get clicks and eyeballs. Savills have Prime, Residential, Commercial, Home Counties, Overseas, Investments & New Homes departments. And they just make sense!

TwentyCi provides a real-time review of the UK market, covering 99.6% of all sale and rental property moves.

IMLA has been representing the views and interests of UK mortgage lenders for 30 years.

You can read their latest detailed reports by following the links at the bottom.

But here’s what changed my opinion from a flat year to a year of further growth:

In January (so far), we have received 45 offers (at an average of 99.02% of asking price) across only 47 available properties. That’s a huge ‘available to:offer ratio’. Granted some houses have received 6 offers, some 0 but it is a good indication of buyer appetite and motivation, many in the knowledge that they may not benefit from the Stamp Duty Holiday.
New Properties coming to market is down 12% year on year. Understandably as many people won’t want strangers in their house during a pandemic, no matter how safe you make the viewing = Less supply.
Lenders are positive. The amount of 90% Loan-to-Value mortgage products available has doubled since the end of last year = more people able to buy = more demand but less supply (as per point 2) = Prices going up.
Gross mortgage lending is forecast to reach £268bn in 2020 and £275bn in 2021, driven by real wage growth, a competitive market and the reduction in political uncertainty.

I was particularly surprised by the news that lenders are bringing out lots of new products at higher loan to values, higher multiples of income, longer terms etc and 07/08 came to mind but as Greg said, all the products had to pass strict regulation (set off the back of 07/08). Watch the discussion panel video, link at the bottom.

Of course the big elephant in the room is Furlough AND Stamp Duty Holiday ending but it appears lenders aren’t so worried about that 🤷‍♂️

Truth is, no-one really knows what will happen in 2021, I certainly don’t, but what is certain is regardless of market conditions, people will still ‘need’ to move whether through choice or circumstances and we’re here to make that process as smooth as possible whatever the external factors!

The golden rule to remember when it comes to any market, property market included, is that it’s all ‘relative’.

If you are planning a move, I strongly advise you to take the time to read the ‘Good Further Reading’ below and cast your own well informed opinion (just save this email until the kids are in bed 😉)

Here it is… My opinion/prediction: +5% house price growth in 2021

What’s your opinion? Pop over and get involved in the discussion on Facebook

Remember, if you need any property help or advice this year (whether that be buying, selling, renting, letting, investing etc), you can schedule a call with one of our experienced agents who would love to help. Just click here to arrange a time & date: powerbespoke.co.uk/advice

All the best

Perry & The Power Bespoke Team

Good Further Reading/Watching (if you’re interested):

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