Spring CEO Cormac Henderson: “While I always try to remain optimistic, I am slightly weary of Rightmove’s latest predictions of 4% annual house price growth next year. In fact, I am weary of any prediction at this time because there is so much we do not know”
The market has been bolstered by the chancellor’s Stamp Duty holiday yes, however this will drop off when it comes to an end. Some pundits are signalling a last-minute extension, however there is nothing concrete yet.
While this isn’t the financial crash of 2008 and our banking system is in relative health, the wounds of the past year won’t just be healed overnight. As job and business support schemes taper off, unemployment is expected to reach 2.6 million by mid-2021, putting significant financial strain on the economy. A no-deal or partial deal Brexit, will both present uncertainty and some inefficiency for many businesses. History shows that political uncertainty tends to dampen the market.
The great unknown will be the impact of the “Carpe Diem effect” of changing consumer behaviours towards suburban relocation. This significant variable could drive up transaction volumes and pricing for certain property types and locations, however it may dampen others. After this year’s summer surge, we saw reduced activity in the second Q4 lockdown and associated new tiered restrictions. Despite the vaccine, it appears likely that these restrictions will remain at least until spring 2021 given case rates continue to rise – hitting their highest levels yet in some areas.
As a result, I would expect prices to show more stable/modest growth around 0-2% with a recovery driven by a surge towards the end of the year as vaccines allow a return to normality, pointing towards a strong recovery in 2021.https://www.cityam.com/uk-housing-market-to-grow-four-per-cent-in-2021/
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