The end of the year is a time to look forward, and back. Not too many people will be keen to look back on 2020, but there will be many people looking to 2021 with the hope that things will improve.
A new forecast, first published on the Homes & Property site, suggests London will witness an increase in property prices by 21% over the next five years.
The study has been carried out by JLL, and it suggests London will outperform the rest of the UK property market next year. While there is tipped to be a national fall of 1.5%, the London market is expected to remain flat. This is rarely seen as a positive outcome, but when you consider the current and predicted circumstances, it is far from the worst situation to be in.
JLL’s head of research, Nick Whitten, expects property prices in areas which were previously less fancied will also increase.
Nick said; “We are seeing buyers prepared to sacrifice commuting convenience in search of more space, which will drive activity in some previously less fancied locations.” Whitten also believes many homeowners will adjust where they live in London, but he doesn’t believe there will be a notable exodus from the capital.”
A shortage of homes will ensure prices continue to rise
Nick Whitten also spoke about the need for further homes being supplied in the market. One of the most pressing factors in the property market is demand outstripping supply. It is no surprise to learn housebuilders, like so many industries, have struggled this year. There has been a shortfall of homes being supplied to the market, and this means house prices are set to rise.
Whitten said; “We expected to see 20,000 new homes built this year against a target of 52,000. In reality this number has dropped to 10,000 for 2020 due to the industry shut-down and the ongoing need to socially distance on site.”
The heart of London will see activity
It is likely the prime London property market will continue to lead the way, but then there is a trickle-down effect across the rest of the market.
Becky Fatemi is a property agent who specialises in prime property, and she said; “Prices have slid this year in prime central London by 20 to 30 per cent making these multi-million-pound trophy homes seem comparatively good value versus the equivalent districts in cities such as Paris, New York and Hong Kong. The residents of such homes spend money on retail, leisure, culture, transport and food, benefiting the wider economy.”
Will the stamp duty holiday be extended?
While the Chancellor appears committed to not extending the stamp duty holiday deadline, there is growing pressure from leading industry bodies.
Becky Fatemi spoke about the dangers associated with stopping the stamp duty holiday abruptly. She said; “The combination of the stamp duty holiday with Help to Buy is like giving a child too much sugar. If the Chancellor ends the stamp duty holiday abruptly, activity could crash.”
Property agent Alex Goldstein questions whether the Chancellor should have held off for longer, saying; “The pent-up demand and need for space in the lockdown was always going drive a mini boom in the housing market. He should have saved the stamp duty for when sales start to taper off, which is beginning to happen now.”
If you are looking for guidance or information regarding the housing market, please get in touch with Hunters Camberwell. As a local estate agent who has the support of a national network, we are ideally placed to provide you with all the help and guidance you need to make an informed decision, so please contact us today.