As we wind down to enjoy the festive period, many people are understandably looking for a fresh start in 2021. According to Rightmove’s recent House Price Index, housing priorities remain high on people’s life agendas for the New Year, with hopeful news for both buyers and sellers.
After the unexpected market outcome of 2020, we have seen house prices finish 6.6% up on 2019. In Yorkshire, house prices are up 8.8%, similar to the 7.1% price increase seen by the East Midlands.
Rightmove forecasts a 4% national average price growth in 2021 as people continue to search for their dream home, though price rises for newly marketed properties will be at a slower pace than this year.
What is the picture nationally?
Rightmove predicts a busy start to 2021 with the Stamp Duty Holiday deadline on the 31st March 2021. Over 650,000 properties are currently changing hands, a number unchanged on last month due to strong sales being agreed for this time of year.
Although there is likely to be a fall in demand if the Stamp Duty Holiday is not extended, estate agents are reporting a remarkable 53% more enquiries from prospective buyers than this time last year.
What does this mean for buyers?
There will be a strong supply of properties available to purchase in the New Year, with many sellers bringing their properties to market despite the seasonally quieter run-up to the Christmas period.
First-time buyers are likely to be least affected by the potential return of the Stamp Duty Land Tax and, in most cases, will be no worse off as the threshold for Stamp Duty returns to £300,000. Buyers looking above this threshold are the ones who will see a real difference in their expectations in 2021.
What does this mean for sellers?
Price rises for newly marketed properties will be slower in 2021 than the unusually high levels we have seen for 2020. Still, ongoing demand, cheap mortgage rates available for some and values achieved for sellers will help to support continued modest price growth.
There is likely to be a lull in momentum in Q2 if the Stamp Duty Holiday isn’t extended, but for many buyers, this won’t impact their decision to move. Instead, some buyers will likely reduce their offers to compensate for the higher tax.