It wouldn’t be the start of a new year without predictions for the 12 months to come. And the forecasts from property experts continue to roll in, despite Covid-19 making it very difficult to look too far ahead.
After a tumultuous 2020, forecasts for the future of the new homes industry fluctuate between optimism and concern, but confidence is gradually being reinstated with the start of the vaccine rollout across the UK.
Here, in an attempt to cut through the statistics and shed some light on the current state of play, leading experts from the industry look into their crystal globes with their predictions for the year ahead.
Jim Wood, managing director at Barratt London
“2021 looks set to be an interesting year for the housebuilding industry. The crucial period in 2021 will be the spring where we will see the stamp duty holiday which has supported the housing market through the Covid pandemic come to an end on top of the phasing out of the current Help to Buy scheme. With Help to Buy-eligible properties around the country now falling under a lower price bracket, however, London’s cap remains at £600,000, so we may see a boost to the first-time buyer market in the capital.
“London is a global city that always appeals to buyers and hopefully shouldn’t see a big Covid effect. People want to be surrounded by services, entertainment and transport, plus with the vaccine being rolled out, 2021 could actually be a great year for property in the capital.”
Becky Munday, managing director of South London-based Munday’s Estate Agents
“Looking ahead to 2021, we expect to see continued stability in the London market as buyers bring to fruition exactly what they want in a property after the lockdown experience. Here in South London, the majority of our clients are expecting babies – they are starting to extend their families and are looking for larger homes to accommodate this so we expect huge traction in the family housing market.
Working from home is becoming the norm so obviously homes that accommodate this are going to be popular, too. We’re expecting the current Stamp Duty Land Tax (SDLT) holiday to be extended, which will help to ease the risk of any drastic price drops or sales falling through that don’t meet the deadline. Young buyers are now snapping up one and two-bed flats again and we expect this trend to continue, particularly if the SDLT holiday is extended.”
Chris Heath, managing director at Cube Homes
“Key to the housing market will be the banks’ appetite to provide mortgages and the general level of confidence in the economy and the future. If a Covid vaccine is shown to be effective and can be delivered at scale, this may likely help to drive the feel-good factor up, in spite of rising unemployment, as those still in employment feel a sense of confidence with the prospect of returning to normal.
The extent to which the house buying public have the feel-good factor will be important to the house building industry over the next 12-18 months.”
Carlo Novato, founder of Haxted
“Hopefully Rishi Sunak will set out a tapering of the SDLT relief programme. Hard cliff-edge changes are always unhelpful. On Help to Buy, the regional value caps are sensible and it seems right to us that the programme is restricted to first-time buyers. One way or another we need to wean ourselves off the state support and start looking for more innovative models of delivery to provide supply into an otherwise forever structurally broken market. RSLs (Registered Social Landlords) will inevitably play a much bigger part going forward and that’s where government will target its fiscal measures.
“Looking at the long-term, we believe the home has been re-defined. We have seen starkly during lockdowns why a home is a sanctuary. We now know again with much greater clarity what it should be, how flexible and adaptable it needs to be, and why quality is everything. The quality and quantity of space has never been important.
Anyone assuming that we can just keep churning out the same old product when we are comfortably in the ‘new normal’ or ‘next normal’ is likely to get a surprise. Buyers will have a far more rigorously researched and understood set of needs and they are to be ignored at our peril.”
Paul Rosbrook, operations director for Fernham Homes
“Undeniably, it has been a year of revaluation for all of us, and for many of us that reflection has been on where and how we live. In early 2021, we suspect we will see a flurry of activity as buyers look to make the most of the stamp duty holiday. Likewise, with the new Help to Buy scheme, we expect to see a lot of activity in the first-time buyer market. Operating in the commuter belt, we are still seeing strong demand for more space, with the increase in home working.
“With Brexit, the supply chains of material will present a difficult challenge for major housebuilders. Here at Fernham Homes, we took the decision to advance purchase the majority of materials to help mitigate this.”
Kush Rawal, director of residential investment at Metropolitan Thames Valley Housing
“As we look forward, I feel that most of us are cautiously optimistic about what the next year will bring for the property market. With hopes of a vaccine giving us some confidence of the start of normality, there is an end in sight, and I expect that we will see a continued demand from buyers seeking stability in the form of quality housing across the country.
This coupled with the government’s clear homeownership agenda should lead to a positive year for first-time buyers across the country. Help to Buy has been a phenomenal driving force in getting people onto the property ladder, but it is time for the industry to look ahead and think about what comes next to ensure that first time buyers are still able to access homes at an affordable price in their preferred area.
This is where Shared Ownership will really come into its own. Despite having been around for over 40 years, there is still a real lack of knowledge about what it means, and I hope to see the sector continue to take necessary strides to raise awareness of shared ownership.”
Edward Heaton, founder and managing partner at buying agents Heaton & Partners
“There is real scope for there to be a whirlwind of activity in the first quarter of next year, particularly in the new homes market, as mainstream buyers rush to try and complete their purchases before the stamp duty holiday ends. I predict there are going to be some extremely stressed conveyancing lawyers in the early part of next year.
In addition, there has been a surprising amount of domestic activity in London this year. It is difficult to predict what will happen after the stamp duty ends on March 31, but it certainly seems unlikely that there will be any house price inflation. Whether prices take a tumble or not remains to be seen.”
Santhosh Gowda, chairman of Strawberry Star
“Moving in to 2021, we expect demand in the housing sector to be stable but below pre-Covid levels, at least for the first six months. The UK housing market has remained resilient throughout various global upheavals and overall the story has only been positive when you take a 5-10 year view. The London property market will continue to remain attractive because of its strong fundamentals, which have yielded stable ROI and capital gains. The big agencies have indicated house price growth to rise by 3% through 2021.
“Any developer would support the extension of Help to Buy in its current form, as it has helped thousands of buyers get on to the property ladder. The changes – which are set to make the scheme available only to first-time buyers – are still very helpful and we look forward to seeing plans post-2023. We are optimistic about what lies ahead of us, as we are seeing positive recovery signs.”
This post has originally been featured in Property Investor Today.