Three Property Market Trends to Expect in 2021
Attempting to accurately project trends and shifts in the UK property market for the year ahead is never easy. Compounded with the chaos 2020 brought to buyers, sellers, investors, and developers across the country, it is difficult to voice any outright assurances for the year ahead.
Recent activity over the past couple of quarters, however, coupled with comparisons from previous times of economic crisis highlights a series of possible scenarios by 2021. Majority of independent experts and advisers foresee the following three trends playing a major role in the housing market over the next 12 months:
A Slowdown in Property Price Growth
The combination of pent-up post-lockdown demand being released on the market and the chancellor’s stamp duty holiday resulted in a massive surge in property sales and purchase activity towards the tail-end of the year. Give things another three months or so and a pronounced cooldown is inevitable, which some anticipate could lead to a halt to house price growth.
For the year, Capital Economics believes that average house prices could fall by as much as 5% by the end of next year. Though this is something of a doomsday scenario – others predict a much gentler slowdown which is unlikely to affect average house prices in most key areas.
Borrowers Looking Beyond the High Street
As major banks and lenders continue to tighten their lending criteria and complicate application processes, the whole thing is playing directly into the hands of alternative finance providers. Development finance providers and bridging loan specialists have noted a major spike in activity, fueled by the growing complications associated with seeking help on the High Street.
Independent lenders have demonstrated their value and importance throughout the COVID-19 crisis, during which many conventional lending channels have been closed completely. The flexibility and affordability of bridging is proving popular among private customers and business borrowers alike. Meanwhile, specialist development finance continues to offer a lifeline to developers looking to get back to business in post-lockdown Britain.
Major Property Market Performance Disparity
Lastly, there will continue to be a major disparity in housing market performance and average property prices from one region of the UK to the next. But what will be different this time around is the prominence of property investment and development hot-spots far outside the usual safe havens.
As people continue to flee from major cities in search of more tranquil rural retreats, areas of the UK once overlooked could burst into life in 2021. In particular, the Northwest and Midlands are widely expected to outperform the South and Southeast – something that could not have been predicted as recently as a couple of years ago.