Well, that was the prediction before the Stamp Duty Land Tax holiday was extended till the end of June, with a tapering programme till the end of September 2021! With the extension, the overall property market has breathed a sigh of relief – buyers, sellers and real estate agents.
Now the scenario has changed, and prices will probably remain high in April 2021. This may or may not include the cities as well, so for Properties for Sale in Hyde Park and other city areas, it is best to contact your local estate agents to give a correct update.
SDLT holiday extension:
The main reason prices were expected to fall in April was the end of the SDLT holiday. Now that it has been extended, more people will want to take advantage of the tax benefit and buy properties. The local Estate Agents in Hyde Park expect this would lead to higher demand and, concurrently, a rise in house prices.
Supply vs Demand:
The demand has almost always exceeded the supply in the UK property market, and with more applications for property purchases going through, sellers will keep their prices high, even though they will have to be competitive. In rentals, the Letting Agents in Hyde Park expect more interest for properties that satisfy tenants’ new normal needs and subsequent demand for these properties.
The government’s “Generation Rent to Generation Buy” plan, with the announcement of a 95% mortgage guarantee scheme, can also lead to an increase in property purchases. This applies to properties up to £600,000 and is not restricted to first time buyers. Buyers need to pay just a 5% deposit and have a fixed mortgage rate or at least five years. However, the smaller the deposit, interest rates will probably be high and a long time will be required to pay off the mortgage. During this time, interest rates can fluctuate. At the same time, there will still be attractive mortgage deals offered. Consequently, an increase in house sales will result in an increase in prices as well.
Despite the lockdowns, due to enhanced technology, virtual viewings have been possible, enabling prospective buyers to “see” the properties even though physical viewings could not be done. This has allowed no slow down in the buying process, with the result that more properties are being sold in this way.
The onset of the vaccination programme has brought hope of a “back to routine” lifestyle. Once lockdowns are over and offices, schools, restaurants and entertainment centres re-open, there may be a trend of return to city living, resulting in properties in cities coming back to prominence in the market. However, with more people having become used to suburban residence with larger accommodation and more open space, it remains to be seen whether the current trend will continue or fall. This will impact prices, both in the suburbs and cities.
Furlough scheme and Economy:
The government has extended the furlough scheme till the end of September 2021. This may allow people to build up their savings due to the curtailment of entertainment and other expenses because of the lockdowns. This could result in more investment in houses. With the hopeful brightening of the economy, more openings for property investment will be given to the public, which will have an effect on prices too.
Buyers and Sellers:
While some sellers have taken advantage of the buoyant property market and raised prices of property, some buyers have realised that they may end up paying more, despite the SDLT holiday extension, or may not be able to have the documentation completed within the timeframe, due to inevitable delays. This may cause sellers to review the prices and cause buyers to have a second think about property investment at this time.
Even though there was a fall in house sales earlier this year and mortgage rates have been on the rise, both sales and rates remain higher/lower than pre-pandemic levels. If the Bank of England interest rates go negative, it will add to the incentive of taking a loan/mortgage and buying property. Though the future cannot be predicted, likely, house prices will not fall sharply – either in April 2021 or for the rest of the year or at least until the end of September 2021. To get real insight into the current property market, the guidance and advice of a professional and experienced estate agent will enlighten the way.