Helped by tax relief, a Brexit deal and the start of a vaccination roll-out - the property market has had an impressive start out of the metaphorical gates of 2021.
But will this early surge in activity set the tone for the rest of the year?
A busy market
Although we’re currently in the throes of another lockdown, it’ll be reassuring to hear that for those people hoping or needing to move, there are early indications that demand in the market is higher than it was in the same period last year (Rightmove Property Index). This is especially significant, given that the market the previous January was markedly active following the ‘Boris Bounce’.
The number of prospective buyers contacting agents also rose between 2nd and 12th January by 12% and sales agreed numbers increased by 9% compared to the same period last year (Rightmove Property Index).
This view is supported by our own website visits, which have continued to increase since the start of January and are also up by 32% compared to the same period in 2020.
Stamp Duty extension
In light of the latest lockdown and a potential bottleneck of buyers rushing to buy before 31st March, there have been calls to extend the tax holiday to further boost the property market.
After receiving more than 124,000 thousand signatures, a petition to extend the Stamp Duty relief by six months was discussed in Parliament on Monday 1st February. Some MPs requested a tapered end to the deadline rather than an abrupt stop, which could potentially lead to home movers pulling out of house moves - but no definitive decision was made. The conclusion of a proposed extension will become clearer in the Chancellor's Budget on 3rd March 2021.
A deadline extension would certainly be welcomed by the market. Stamp Duty relief has been critical in stabilising the housing market and has benefited countless homebuyers since July last year, affording them to move to a property that they would not be able to otherwise.
The recent vaccination roll-out has provided many with a glimmer of hope and a possible end in sight to the pandemic that has dominated our lives. Although a great deal still needs to be done, with the vaccine well underway and as more doses become available, there is likely to be renewed confidence in the wider economy and property market.
Is outdoor space here to stay?
Unsurprisingly, successive lockdowns have led to a change in priority amongst buyers and tenants, with outdoor space now becoming top of the check-list. This shift in preference is likely to continue through 2021 (and beyond) but it could be tempered by a period of job uncertainty following the end of the furlough scheme.
It remains to be seen whether this level of activity can continue in the long-term with the greatest determinants on the market including the outcome of the Stamp Duty extensions debate, how effective the vaccinations prove to be, and Brexit. Not to mention the impact on jobs once the Furlough scheme unwinds. These factors are in addition to the usual – and also unpredictable – factors that naturally influence the property market. One thing is for sure though, the next few months are going to be interesting.
You can keep up-to-date with all of our market updates here.