Most experts are hopeful about the much-awaited recovery of the UK property market in 2021. Of course, some experts believe that the impact of Covid-19 on the real estate market will continue to be seen throughout 2021. Unfortunately, no experts can predict with any amount of certainty exactly what the future of the UK real estate market holds. While some experts believe that we will see a fall in average real estate prices, some experts have recently concluded that we might see a whopping 5 per cent rise in the average price of property in the UK in 2021.
The average price of property prediction
In 2020, the average house price growth in the UK increased by a surprising 7.3 per cent even though the overall economy had gone down by 10 per cent. According to Savills, a leading real estate company, the average price of property in the UK will rise anywhere up to 4 per cent in 2021. According to Knight Frank, the UK property market is expected to prosper thanks to the booming start of 2021. As per Lucian Cook, the average growth price will rise by 20 per cent over the next five years, sustainably and consistently. In the last few years, buyer’s and property investors were apprehensive of the future of the property market in the UK. However, as experts predict a rise in the average price of the property or at least a certain amount of stability, the buyer’s confidence has certainly increased. So, if you’ve been thinking about investing in real estate in the UK, now might be a good time to get in touch with estate agents in Stafford.
The impact of stamp duty holiday
After the first lockdown in the UK, the government introduced the stamp duty holiday, which was a temporary suspension of the compulsory stamp duty that every buyer has to pay on the real estate purchase. The government announced this scheme to boost the economy and revive the real estate market, which had essentially gone into a slump after the first lockdown. Initially, the stamp duty holiday was supposed to end in March 2021. However, upon seeing the enormous success of the stamp duty holiday and the increase in demand for real estate, the government decided to extend the stamp duty holiday until June 2021, which was then extended until September 2021. It seems that the temporary suspension of stamp duty has certainly boosted the buyer’s confidence which has led to an increase in demand for real estate. Ultimately, the stamp duty holiday was a great initiative for the UK property market and will continue to help the market recover, at least for the first two to three quarters of 2021. Whether or not the government decides to extend the stamp duty holiday after September 2021 will play a big role in how the real estate industry fares at the end of the year.
Increase in low deposit mortgages
Due to the uncertainty around the Covid-19 pandemic, banks and lenders drastically reduced the availability of a low deposit mortgage to the point where it was almost non-existent. Due to this, many first time buyers and potential investors were unable to buy their dream homes. Seeing the situation at hand, the UK government introduced a mortgage guarantee scheme. Under this scheme, buyers and investors could avail of a mortgage by paying just 5 per cent as a deposit. While the mortgage guarantee scheme has only been introduced recently, it has already helped boost the buyer’s confidence. Nationwide lenders and big banks such as Lloyds, Natwest, HSBC, and Barclays offer low deposit mortgages under the mortgage guarantee scheme, which has further created a sense of confidence among banks and lenders. The success of the mortgage guarantee scheme will definitely boost the property market as a whole.
At the end of the day, it is important to remember that the Covid-19 pandemic affected economies as a whole. Various industries suffered, from the aviation industry to the hospitality industry. Countries were forced to go into lockdowns, which led to businesses shutting down and firms slacking off employees. Many people lost their jobs while many faced salary cuts. As the vaccine rolls out and the economy starts to pick up again, the property market in the UK will soon follow suit. At this point, the best thing to do is be hopeful for a better tomorrow and continue to make sensible and well-researched investment decisions when it comes to the property market in the UK.