As we approach the end of the year, we wanted to share thoughts on how the property market has performed this year and factors that may affect it over the next two years.
In 2020 the demand for properties for sale increased substantially, with this increase in demand we saw house price growth across the UK. Annual house price inflation was +3.5% across all regions. At a more local level, in Nottingham, the annual price inflation was over 5%, compared to last year. Our article – House prices are soaring in Nottingham – showed that the average price for a property in Nottingham is £159,100.
After Summer this year the demand for houses has slowed down, but it is still 34% higher than it was at the same time in 2019. The stamp duty holiday has helped incentivise people to invest in property, and there are still a high proportion of sales to be completed in 2020 Q4, and 2021 Q1 before the stamp duty charge is reinstated in April 2021. The graph below shows the trend in housing sales over the past year.
Factors which will shape the property market in 2021
It is hard to state with certainty what will happen next year to the property sector as there is still so little known about how the Coronavirus pandemic will affect us in the UK as we move into the New Year. Below is a list of factors that we need to be taken into consideration over the next couple of years as these will impact on the property market.
In summary 2021 is being seen as a transition year as we continue to adjust to the impact of the COVID19 pandemic, and the economy starts to recover.
In 2021 the predication shown in the Zoopla Insights report (October 2020) suggests that just 4.5% of homes to transact, compared to a 60-year average of 7% and a high of 12% in 1988 (a homeowner moving every eight years). A combination of demographic, social, policy and economic factors have all acted to reduce the liquidity of the housing market to a level that can't go much lower in our view.
We are specialists in the letting, management and investment of residential properties in Nottinghamshire, so if you are a landlord or property investor contact us by calling 0115 704 3163 (Nottingham) or 01623 277115 (Mansfield). Alternatively, you can email us via our contact us page –click here.