Property investors and developers alike are conscious that 2021 can be as full of turmoil as 2020 when it concerns the UK property market. However, after a strong performance in 2020, is there anything investors should be concerned about this year?
With the rollout of the vaccine, the end of the pandemic is in sight. How soon this comes is still uncertain as we wait to see the impact the vaccine has on infections and death rates. However, many commentators are now beginning to imagine a UK property market post-COVID and predict what 2021 could look like for the property investor.
Despite the pandemic, the UK property market was a success-story in 2020 with the highest growth rate since 2015, finally bringing an end to the Brexit-related price stagnation. Despite a global pandemic, this outstanding showing has shown that homeowners can still get a return on their investment. This is good news for investors looking to continue developing their property portfolio, but will this trend continue into 2021?
Since the start of January, we can’t expect to see much of a demand for property or many transactions taking place with the third lockdown in place. However, as we ease out of lockdown, and it becomes easier for viewings and meetings to take place, there is no reason why property investors can’t look to the future with excitement. 2020 did not derail investors from purchasing, developing and selling or renting their properties after all.
Apart from the 7-weeks of closure, the UK property market was still able to continue as usual, albeit following some rules and restrictions. This is the same for 2021, and so we can expect some incredible house price growth in the coming months.
Rightmove is currently predicting a housing growth of 4% by the end of the year. They argue that any potential adverse economic or political developments will be swept away by the uptick in demand for properties by people who have been stuck in a home they no longer love for most of 2020. This is a prime opportunity for property investors looking to add more properties to their portfolio.
And while COVID-19 did not seem to deter demand for properties and transactions in 2020, we cannot expect Brexit to either. Although Brexit caused a housing price stagnation between 2016 and 2020, this was due to its surrounding uncertainty. Now that the deal is completed and Brexit has been finalised, people’s fears or concerns are eased around buying or selling property. As a result, commentators predict that Brexit will not have any negative effects on the British property market, at least any time soon.
However, there are still some issues that arose in 2020, which are expected to continue at least in the short term in 2021 due to COVID-19. Many mortgage lenders have reduced the number of mortgage products they have available, while many mainstream lenders have tightened the requirements for a successful mortgage application.
There is also the impact of Stamp Duty Land Tax to consider in 2021. As a property investor, now is the time to purchase property and save money upon Stamp Duty Land Tax. The SDLT is due to end March 31st and can offer buyers up to £15,000 in tax savings on any property transactions. This is a huge incentive to purchase property in the coming weeks to take advantage of this break before the holiday ends.
The UK property market’s ability to overcome a pandemic and remain strong throughout 2020 gives us optimism for 2021. With demand increasing and people’s fears of buying and selling property easing, there is no reason why developing your property investment portfolio in 2021 can’t happen!