Nested's property expert's give their view on performance in the property market in London
It’s been a momentous time for the UK and global economy, and as we cross our fingers that lockdown will begin to unwind, there are some signs that the property market is set to bounce back.
March has been a busy month, and there were plenty of big announcements in Chancellor Rishi Sunak’s Budget. With the arrival of a government-backed mortgage guarantee, Yorkshire Building Society have become the first lender to announce a 5% deposit mortgage, and the likes of Barclays, Santander and HSBC are set to follow suit in April. Already, there are signs that confidence is returning to the market, with first-time buyers able to borrow more easily.
While smaller flats have been a harder sell over the past year – particularly those without outside space – the return of first-time buyers could see demand for this property type increase. This could have a domino effect, with sellers freed-up to buy larger houses for their onward purchase. While many flats struggled to sell in 2020, there is evidence of a correction in prices which has got the market moving again.
Looking ahead, upsizers can expect more family homes to come onto the market in the spring, as families are often keen to move before the end of the summer holidays.
Much has been made of the so-called London exodus in 2020-21, with some talk that the capital’s population could be set to fall for the first time since the days of Duran Duran (or 1988 if that’s before your time). And while no one has a crystal ball, one perspective is that buyers have a rare opportunity to swoop in central or inner London, especially as many landlords have reduced their rents and struggled to find tenants.
Sentiment-wise, young professionals who’ve spent the year back with their family bubbles in small towns and rural areas may be hankering for a return to city life once lockdown restrictions ease; the avalanche of pub bookings taken for the months ahead tells its own story. If history is anything to go by, reports of the London property market’s demise have been greatly exaggerated.
We’ve all got itchy feet after staring at the same four walls for more than a year, but as things start to brighten up in the wider world, there is every reason to think that now could be a great time to sell. Rising confidence and a glut of first-time buyers mean you’ll have a decent chance of finding a proceedable buyer in the springtime. And while the Stamp Duty extension – a £500,000 nil-rate band until June 30th, then £250,000 until September 30th – means you’ll need to get your skates on to make savings, movers may equally find themselves in a position where they can negotiate a decent price on their onward purchase if the prospect of beating the Stamp Duty deadline dwindles.
But of course, there are many variables at play, not least the vaccine rollout and any unforeseen spikes in transmission; and of course the prospect of higher interest rates, with some commentators forecasting an increase in rates as governments spend their way out of a recession.
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