At the turn of a New Year, I generally post my round-up and predictions. I am often asked which way I think the market will go for the year ahead and whilst I am no Mystic Meg, after 30 years in the business I generally call it right.
This year however, I am very uncertain as to how the property market will perform, bearing in mind that no-one predicted a new virus would wreak such havoc throughout 2020.
Despite the awful impact of Coronavirus, the devastation on a personal and business level for so many people, the Housing Market performed exceptionally well during 2020. We saw transactions delayed and fewer homes coming onto the market, however, sales were very strong, once the initial lockdown of March/April was lifted. More than ever, it seemed as though buyers were leaving the cities and flocking to more semi-rural areas such as Hebden Bridge and Todmorden. Our excellent commuter links, our beautiful scenery, our thriving independent shops and businesses, all helping to attract buyers to our towns and villages. Homes with gardens and space for home offices or studies were in particular demand. Great news for sellers, although the fierce competition did mean local buyers were often priced out of the market, especially First Time Buyers.
According to a report in The Guardian house prices rose to a six-year high at the end of 2020, with Nationwide Building Society reporting a rise of 7.3% in the year. A report in the Daily Mail  cites Government figures showing rents hit an all-time high of £725 per month in England and £1,435 in London.
Despite 2020 being a year of surprisingly strong sales, the market was frustrated by delays with the sales process. Many people were working from home, or furloughed, which caused delays with mortgage applications and administration, delays with surveys, conveyancing and in particular delays with local authority searches. We enter 2021 still with a back log of searches and many buyers are worried these delays are going to mean they will potentially miss the stamp duty deadline at the end of March 2021. I covered the stamp duty holiday in a pervious blog so I will not hark on about it here. Did it result in more house sales ? No, in my opinion it did not, it simply lead to higher sales prices.
So looking forward to 2021, has the momentum slowed ? Will the bleak economic outlook cool the property market and result in price falls ?
As I mentioned, it is very hard to call but I feel there will be very different outcomes for different town and cities throughout the UK. Many “experts” certainly think the market will cool and the growth of 2020 will not be repeated. The Guardian’s article cites Halifax as expecting a fall in house prices of between 2% - 5%, the Office for Budget Responsibility, the Treasury’s independent forecaster, predicting an 8% fall, Rightmove expects prices to rise by 4% and researchers at Savills are expecting the market will be flat across all parts of the UK in 2021 before accelerating again in 2022.
Mortgage companies have already reigned in their lending, but interest rates are still very favourable and rents are still so incredibly high. If you can save a deposit then buying still makes sense. The supply of housing, despite promises of growth, is still shockingly low so demand is still there. The desire to leave the city and the increase in home working, all point to continued demand for locations such as Hebden Bridge and Todmorden. The Daily Mail article explains that a survey of 1,000 firms by the Institute of Directors shows 74 per cent will continue with some form of working from home in 2021. So whilst more urban areas may indeed struggle this year, I suspect we will be cushioned from the economic problems and that our market will remain buoyant.
I am however, rather worried about the long term impact this type of situation can lead to and I am reminded of a film I saw last year – Bait. This film explored the tensions and frustrations of a local community coping with an influx of tourists and second home buyers. Pricing out local buyers, especially the young First Time Buyers, and pricing out local renters is something that seems to happen in many tourist locations and beauty spots. Managing this without prejudice and nimbyism is a difficult balance and certainly will need careful Government intervention. There has to be a way to provide affordable housing for local people whilst maintaining a strong local housing market. A topic for later discussions I am sure!
 The Guardian – 30 December 2020 Patrick Collinson & Julia Kollewe
 The Daily Mail – 31 December Graham Norwood