Market Update: December 2020

It’s been another full-on month in the world of property for us at Baillie White Lettings!

It would seem that people in our area are still very keen on finding a new place to call home. Many people are of course currently still working from home, so their living and working arrangements are uppermost in their thoughts at the moment.

Properties are selling very quickly just now, partly because of this and also because of the Stamp Duty Holiday which you will be aware of if you've been following our previous property market round-ups (or any major news coverage!).

It is perhaps no great surprise that COVID-19 and the Stamp Duty Holiday remain key to the property market's ups and downs at the moment.

While for some daily life is still uncertain, and of course with the introduction of a new Tier 4 here in Essex, the situation is rapidly changing, you can rest assured that we at Baillie White Lettings remain absolutely committed to helping you to let your property.

If you need property advice, then please do get in touch with us and we’ll do our very best to help.

So, here is a round-up of what’s going on in the property sector nationally, but of course, if you want to know about the more local ins and outs, then get in touch. Call us on 01268 955001 or email pippa@baillie-white.co.uk.

Is the housing market open in Tier 4?
At the time of writing, the housing market remains open across the UK, including in the new Tier 4 areas of England. An announcement from Housing Secretary Robert Jenrick on social media said: “Housing market update: the sales and rental markets remain open in all tiers. All associated activities can continue as before.”

But he also said: “Please follow the Covid-secure guidance. And use your judgment as to whether it’s necessary right now.”

The Ministry of Housing, Communities and Local Government has also given guidance for the Tier 4 locations in England:

“Estate and letting agents and removals firms can continue to work. If you are looking to move, you can go to property viewings. People outside your household or support bubble should not help with moving house unless absolutely necessary.”

Government says No to Stamp Duty holiday extension
The Stamp Duty holiday initiated by the Government as a response to the ongoing coronavirus pandemic, will not be extended beyond March next year. This might leave some sales falling through as the deadline approaches, and buyers panic about missing out if completion is delayed.

More than 23,700 people signed an online petition calling for the holiday to be extended, triggering a response from the Government.

It said: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The Government does not plan to extend this temporary relief.”

The Stamp Duty holiday has been for many the catalyst for confidence in the property market and it remains to be seen what will happen after it ends.

Rightmove forecasts price growth
Property website Rightmove has predicted a four per cent price growth for 2021, saying that “housing priorities outweigh uncertainties”.

Referring of course to the COVID-19 pandemic and Brexit, Rightmove’s research suggest that the momentum of 2020 will carry on over the next 12 months, albeit slightly slower.

Additionally, they note that the property market was already on a good trajectory prior to the Stamp Duty holiday so the end of the holiday may not be as significant as some may believe.

Mortgage lending rules to be reviewed?
Zoopla reports that The Bank of England is “reviewing mortgage lending rules which could make it easier for first-time buyers to get on to the property ladder”.

With everything that is going on in the world, the bank’s Financial Policy Committee is due to look at whether the “affordability criteria that borrowers must pass in order to qualify for a mortgage is still appropriate”.

There are stringent rules in place, and some would say this is needed because affordability is a key issue. But it is thought that the rules disproportionately affect first-time buyers, and this has consequences for the property sector as a whole. Our view on this is: watch this space!

Rental prices see slight increase
There has been a slight increase in average rent paid by tenants in private accommodation. Figures from the Office for National Statistics show rents increased by 1.4 per cent in the year to November 2020.

The ONS reports that “growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London”.

However, the ONS goes on to say that rental growth began to “pick up” well during 2019, driven by the London growth, although it is generally flat with no particular highs and lows.

Growth good news, but a word of warning
House price growth “rose to 6.5 per cent” in November, according to analysts at the Nationwide building society. But while they say this was the highest rate since January 2015, Nationwide’s Chief Economist, Robert Gardner, strikes a word of warning:

“The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy.”

We at Baillie White Lettings love to scour the news headlines about property and are delighted to bring you property market articles to keep you up to date. If you are thinking of moving home please get in touch with us on 01268 955001 or email pippa@baillie-white.co.uk to start the conversation.