Associate solicitor Manisha Bhula, head of leading law firm Blandy & Blandy’s residential property team, outlines findings from the firm’s recent research, which sought estate agent’s views on the outlook for the Thames Valley’s property market in 2021 and beyond.
According to land registry data, as of November 2020, UK prices had risen by 7.6% year on year. The latest data also shows that property transactions between October – December were 43% up on the previous quarter and 14% higher than the same period in 2019.
The land registry puts this busy end to the year down to the Stamp Duty Land Tax (SDLT) ‘holiday’ and the impact of stalled transactions and pent-up demand on the market.
As we look ahead at 2021, there is not a consensus among leading forecasters, other than perhaps that any slowdown or downturn to come will be nothing like the drastic fallout following the global financial crisis in 2009.
Bank of England figures show that 104,969 mortgages were approved in November 2020, the highest level seen since August 2007. Whilst according to HMRC, 115,190 sales took place during the same month, outperforming November 2019 by 19.3%.
Rightmove has said that this year began with 650,000 property transactions yet to complete, which it suggests will ensure that the market remains busy in the first quarter. As the UK moves into quarter two, the stamp duty ‘holiday’ will be set to end on March 31, with the ‘furlough scheme’ also concluding at the end of April.
This week, the Bank of England has predicted that economic growth will ‘recover rapidly’ in 2021, thanks to increasing consumer confidence and spending as a result of the (so far) successful vaccination programme. While PWC/Demos’ Good Growth for Cities 2020 report has ranked Reading second in a list of UK ‘cities’ that are best placed to withstand the economic shock resulting from the pandemic, and to stage a strong recovery.
Estate agents’ views – our findings
Blandy & Blandy recently invited representatives from over 35 estate agencies in the Thames Valley to share their predictions on what may lie ahead. The results were as follows:
- 44% believe that the stamp duty holiday will be extended by the Government, 56% think it will end on March 31.
- 42% predicted that house prices in the region will remain flat throughout 2021, while 33% expect a fall of up to 5% and 25% suggested that prices will increase by up to 5%.
- Their forecasts for 2022 were more optimistic, with only 17% expecting prices to remain flat and 25% that prices will drop. 58% predicted that prices will rise next year.
- Focusing in on new build homes, 60% of agents felt that the supply of new homes coming onto the market will increase in 2021 versus last year, while the remaining 40% predicted that levels would remain the same. None suggested a fall.
- In terms of overall market activity this year, in comparison to 2020, 55% predicted a flattening in the number of transactions, 12% an increase and 33% a decline.
- 70% described their confidence in the Thames Valley’s property market as “very high” or “high”.
Blandy & Blandy’s award-winning Residential Property team can help if you are considering a move in 2021. The firm has offices in Reading, Henley-on-Thames and London and is accredited by the Law Society’s Conveyancing Quality Scheme (CQS).