Written by Wesley Muchimwe | 8th January 2021

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What does lockdown mean for property in 2021?

In the current climate good news is thin on the ground, but the housing market is one of the few sectors of our economy that is booming. The latest data from the Bank of England shows that mortgage approvals in November were at the highest level since August 2007.

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House prices have been hitting record highs since the first lockdown ended last summer and there are rumblings that the stamp duty holiday could be extended beyond the end of March.

During this third and let’s hope final lockdown, Michael Graham is continuing to work with strict protocols in place. Elsewhere in the industry, surveyors and contractors can still visit your property and removal firms can help you move as long as strict social distancing is observed. So with the sector very much open for business, whether you’re buying, selling, renting or letting, what can you expect from the housing market in 2021?

  • High prices: House prices have been hitting record highs since August 2020 and analysts expect growth to continue as the sales agreed during the summer complete through the winter. Nationwide have just revealed that UK house-price growth was 7.3% last year, the highest growth for six years. The value of properties increased by £15,638 on average during 2020 despite the pandemic.


  • Low Base Rate: In March, the Bank of England dropped the Base Rate to a record low of 0.1% to boost the economy. Economists expect the rate to stay low to help the country come through the pandemic. Financing loans will therefore stay affordable for homeowners and up-sizers.


  • Stamp Duty Holiday: Up and down the country people are rushing to complete their home sale before the stamp duty holiday ends on 31 March. There has been no official announcement about an extension to this date, but the new lockdown could change that. The date for the Budget is set for 3 March 2021, when the Chancellor will set out the next phase of the plan to tackle the virus, a plan which the property market hopes will include a review of that decision.


  • Good news for first time buyers: 10% deposits are set to return as HSBC re-introduces its 90% Loan to Value mortgages, a possible lifeline for first time buyers saving for a deposit. HSBC has confirmed that it will offer a range of two and five-year fixed rate options up to 35 year terms. Mortgage rates will be announced on January 12. The Yorkshire Building Society and TSB are likely to follow suit but are yet to announce rates. Many lenders withdrew low-deposit mortgage deals last year, so this is great news for people hoping to get a foot on the property ladder.


  • Continued high demand for country properties: We’ve all been adjusting to a new way of life and for many people their quarantine experience has resulted in the desire for a new home. This latest lockdown is expected to continue the trend for London buyers to look for a home in a rural community, with more space inside and out.


  • Stable housing market predicted for 2021: Research companies are mixed in their long term forecasts for house prices in 2021, but as long as the vaccination programme is successful in ending the pandemic, experts agree that a swift economic recovery should prevent a house-price crash. By the end of the year, with the majority of the population vaccinated and Brexit a way of life, the property market will, hopefully, settle down and stabilise.


  • Advice for buyers and sellers: An inevitable consequence of the UK’s booming property market is that lenders and conveyancing solicitors are working at full capacity, with transactions taking slightly longer to complete. Buyers and sellers can help speed up the process by providing all their necessary paperwork as early as possible. Sellers should ask their solicitor to send the draft contract as a priority and provide all documents detailing works carried out to the property so that any questions can be answered rapidly. Buyers should collate evidence of earnings, proof of address and ID and recent bank statements to show to the vendor. Keeping in regular contact and working together with both your agent and solicitor will help to ensure as smooth a move as possible for all involved parties.

These are uncertain and challenging times for all of us and if you have any questions or concerns about buying, selling, renting or letting then please do get in touch with your local Michael Graham office. Together we can keep moving safely.

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