Property Market Update
Low-interest rates, combined with the imminent expiry of the Stamp Duty Holiday and changes to Help to Buy mean the market is in full swing coming into the New Year. This is on top of 2020 which saw a 5 year high in the market with an increase of 6.5%.
However, caution should be taken. With the Stamp Duty Holiday ending and the labour market fallout from the pandemic, it could mean a significant slowdown as the year progresses. 90% loans are now back available, but the rates are significantly higher at 3%+ and with the younger generation more exposed to unemployment risk, the most affected demographic from the pandemic will be First-Time Buyers.
There are no indications that the Stamp Duty Holiday will be extended past 31st March 2021. Currently, lender’s service standards are slow and local searches are taking 2 months in some areas to come back, meaning that time is fast running out to take advantage of the tax break.
The lockdown restrictions have changed our lives in many ways, one of these was a shift in priorities away from city centre apartments in favour of access to green spaces, with ‘Gardens’ topping the search terms on Zoopla in 2020. Also popular, were ‘detached’, ‘rural’ and ‘secluded’.
2020 also saw increasing vacancy rates on the high street as the retail industry took a significant hit through the pandemic, accelerating the structural changes already underway as a consequence of the fourth industrial revolution. However, many of these units remain fitted and occupy prime positions in city centres. In addition, landlords are more willing to share risks with brands such as turnover-based rents and flexible leases, more commonly found in Europe. This presents an opportunity for strong UK brands and international brands to capitalise and grow.