With 2020 now officially behind us, it’s difficult not to dwell slightly on a period which has no doubt been difficult for all. But, after almost a year of abnormality, I am personally looking to 2021 with fresh hope and much excitement and to helping more people with their property needs.
Below are my thoughts on what will influence the property market in Newbury over the next 3 months.
The outlook for house sales at the start of 2021
With many people now working from home for the foreseeable future, it’s likely we’ll continue to see an increase in the popularity of larger properties where a work/life balance can be more easily maintained which could well see prices rise. Outdoor space will also be highly sought after if periodic lock downs continue to be imposed with buyers keen to provide a safe environment for their families.
On 8th July 2020, Chancellor Rishi Sunak announced a temporary freeze on stamp duty land tax (SDLT) on residential properties worth up to £500,000. As a result, Q4 of 2020 was an exceptionally buoyant time for the property market as buyers scrambled to take advantage of potential savings of up to £15,000.
This is likely to continue until the scheme’s deadline of 31st of March 2021. Indeed, we could now see a race for many buyers to meet this deadline due to the growing backlog for searches and surveys to be completed in a timely manner. Whilst the pandemic has clearly not slowed the property market, it has of course impacted on the efficiency of ancillary services provided by local authorities, solicitors and of course mortgage providers!
Like many others, I have questioned why this stamp duty holiday has not already been extended. I still feel the government must extend the scheme otherwise there are going to be a significant number of fall throughs costing buyers and sellers many hundreds of pounds, not to mention stress!
On the upside, those who have put aside the amount that may be needed for the stamp duty but are yet to find the property of their choice could be in a strong bargaining position post March 31st, where chains or transactions have or are collapsing, allowing them to step in and negotiate a deal.
What can sellers do to ensure they complete?
Depending on whether you are part of a chain, selling to one buyer or even moving into rented accommodation, being in a position to make concessions is so important post the SDLT holiday.
Being flexible here should allow you to complete the transaction, but let’s hope the government do make an extension. As we have seen during the Christmas period, they have not been afraid to make changes at the very last minute, but a little notice on this one would be beneficial to all.
What about the rental market?
Surging tenant demand has seen rents rise in some areas and void periods fall. On average we have seen an increase of up to 3% on 2019 in some areas (source Property Reporter 2.7.2020).
In my opinion the number of people looking to rent in Newbury is likely to increase given the average deposit for a first-time buyer is now around 15%. For a one bedroom flat in Newbury with a purchase price of £160,000 this equates to £24,000. The urge for young people to leave the nest is also unlikely to change.
Does this help landlords?
Although the SDLT holiday does not benefit owners of second properties, the growing and diversifying population of renters may mean landlords can benefit by investing in additional property.
This may also benefit sellers who miss out on the SDLT holiday but still have a partial chain or need to sell for other reasons. A property investor could be the lifeline they need. Landlords looking to increase their portfolio should certainly be ready post 31st of March.
We’ve also seen a big shift in the older generation choosing to downsize and/or moving to rented accommodation for pension or other reasons which offers landlords further opportunity of quality tenants.
Whether it be investing in your first rental property or adding to your portfolio; looking to buy for the first or tenth time or looking to set up home as a tenant to enjoy your own space, the first 3 months of 2021 are looking bright for the Newbury property market with opportunities for all.
The only fly in the ointment could be the challenges some are facing in securing a mortgage with banks becoming ever harder to please in the current financial climate.
If you'd like to speak to me about selling or letting your property in Newbury or need impartial mortgage advice then please do get in touch.
Call 01635 871 087 or email on [email protected].