When it comes to the capital’s property market, 2020 has certainly been an unpredictable year. The COVID lockdown saw house sales grind to a near standstill at the start of the year, only to pick up rapidly after the government announced the introduction of a stamp duty break.
With the vaccine on the horizon industry experts are starting to make tentative predictions about what 2021 will hold. Here’s a run-though of what might happen.
2021 London property forecast
The bubble may be due to pop…
The Chancellor’s stamp duty holiday incentivised many homebuyers to purchase a property which in turn drove house prices upwards. Sales increased rapidly in the capital with some estate agents reporting that demand was exceeding supply.
Of course, accelerated action of this nature is unsustainable and most experts agree that prices will come down again slightly by summer 2021. Likewise, numbers of sales may drop particularly after 31st March when the stamp duty break comes to an end. This may be good news for those looking for a bargain property.
The skewed market may start to balance
Evidence suggests that the lockdown adversely impacted lower-income workers when compared to their higher earning counterparts. As a result, the properties being sold were more expensive which created imbalance on the market.
If the vaccine is indeed in sight, lockdowns will be a thing of the past which means more workers will be able to earn again. This may boost numbers of lower-priced homes being sold.
The impact of a recession may start to hit
It’s difficult to say with any certainty what the long-term economic impact of COVID-19 will be. However, a minor recession may be on the cards which might slow up the housing market for the next year or so.
One thing that most experts agree on is that the future of the country’s finances is unpredictable. In the past property has typically held its value far more effectively than stocks and shares and that may be the case in 2021.
Priorities may change
Lockdown drove employees to work from home. As such, homebuyer priorities started to shift. For example, many people sought homes with outdoor space which was inspired by frustration at being stuck indoors for so many weeks. A home office became a greater priority too and that’s likely to continue as many workers have said they’d continue operating from home if they were able to do so.
This may cause a shift in buying habits with previously ‘less desirable’ homes suddenly becoming more appealing due to them having workspace and a garden.
Should you buy a property in London in 2021?
If you’re thinking of purchasing a home in London, then you may want to act quickly to cash in on the stamp duty break. This offer saves the average homebuyer several thousand pounds on their purchase which is a great incentive.
Keep in mind though, this offer is set to finish at the end of March. After that the market may be subject to change. For example, house prices may fall which may make it worthwhile to wait a little longer before you start scouring the market.
If you’d like help or advice about buying a property in North London, get in touch with our team today.