Next week, the Nationwide Building Society is publishing its March house price index. Prices have been robust ever since the Stamp Duty holiday was announced last summer, but how do you think the residential property market is going to fare this year? Will the property market emerge from the pandemic relatively unscathed or is there turbulence, due to the prospect of rising unemployment, ahead?
3 responses from the Newspage community
With the Stamp Duty holiday extension, we have seen even more confidence in the property market. Although there is a risk of rising unemployment, there has been an opportunity to save significant sums of money in Stamp Duty since last summer and people continue to capitalise on that for now. Looking forward we and our homebuyer clients are very positive about the outlook as the national lockdowns are now easing and the successful vaccine programme has injected confidence into the market. Even when the Stamp Duty holiday is over, we expect people to continue to move as their living requirements have changed since Covid-19. When we emerge from the pandemic, more people, who have been sitting on their hands for the past year, are likely to move.
A tough one to call at this stage. The world has entered uncharted economic territory in the last year and a buoyant housing market tends to go hand-in-hand with times of economic stability and prosperity. Rishi Sunnak's creative economics have ensured partial stability through the economic storm and phasing out the Stamp Duty holiday should help reduce the shock as it returns - property purchase tax in the UK is a major factor in some people's desire and ability to move.
Overall, we're optimistic about the UK property market this year. While the threat of mass unemployment is obviously a concern, this is mitigated by the general public's desire to get back to how things were pre-pandemic. Those who managed to hang on to their jobs have been saving or paying down debt as a result of having nowhere to go. As a result, a significant amount of spending is likely to happen as the year progresses and the property market should benefit from that. Our clients are giving us a sense of optimism and lenders are beginning to show an appetite to lend to clients with lower deposits albeit at slightly higher interest rates. First-time buyers have been in hibernation as a result of lenders not offering higher loan-to-value products during 2020 but demand among this key group is growing as lenders start to once again offer more small deposit loans. First-time buyers, of course, power home movers further up the ladder so we don't expect demand for property to reduce any time soon.