Since reopening after the lockdown, property markets across the UK have enjoyed a mini boom. The main instigator of said boom was the lowering of the effective rate of Stamp Duty by the Chancellor back in July which meant some movers could save as much as £15,000. The cut is due to last until March 31, 2021 and the course of the property market in Maidstone & Barming in 2021 will very much depend on what happens after, or indeed if, the rate goes back up.
Property markets across the country have been open since May, when the government told estate agents like us we could go back to work. As an industry, we were prioritised. The reason wasn’t just just because we’re lovely people, but because significant parts of the UK economy depend on people moving home. Industries like removals, decorators and furniture suppliers all rely on the housing market. Arguably more important is the new build market which employs hundreds of thousands of workers, all of whom would be out of a job if no-one moved home.
Since late spring, we agents have been conducting in-person house viewings in a covid-secure manner. Apart from things like face masks, gloves and social distancing, it’s been very much business as usual. Better even because of this mini boom. In Maidstone & Barming, we know from our own direct experience that transaction numbers have risen significantly. At the best of times, the Land Registry has a big delay in revealing what happened to sales levels in a given month. In the time of Covid it’s even worse because of staffing issues. As a result we can’t yet tell you the exact numbers. Nationally, however, the picture is clearer. Provisional data from HMRC shows that 105,630 property sales went through in October 2020, the highest number recorded in a single month since 2016 (which again was due to people moving before Stamp Duty on second homes was raised).
The picture for house prices is a bit more complicated, and it depends to whom you listen, but it’s universally positive (assuming you like prices going up!). The Land Registry tells us the price of a home went up by 1.7% month-on-month and 4.7% year-on-year in September. Property portal Rightmove’s index, which is based on asking prices, says that in November prices had risen by 6.3% year-on-year. Nationwide’s index (based on mortgage lending) reported a 5.8% annual rise in prices in October, while Halifax reported a 7.5% annual increase.
The big question is ‘what happens next?’. All markets are heavily driven by ‘sentiment’, which means how happy buyers and sellers are feeling. From the conversations we have with movers in Maidstone & Barming every day, we know there is a lot of very positive sentiment around. There is no unanimous view by experts as to whether the current boom will last. Indeed, price growth could slow down once the government’s coronavirus financial support schemes and the stamp duty cut come to an end. The Centre for Economics and Business Research (CEBR) certainly thinks so, predicting prices could fall by 14% in 2021. Likewise, Halifax believes the housing market will eventually feel the effects of the economic downturn, with â€˜greater downward pressure on house prices in the medium-term’. This doesn’t mean they think prices will necessarily go down, they may simply stop rising as quickly. Nationwide says the withdrawal of government support schemes could â€˜dampen housing activity’. Rightmove says the market is likely to continue performing well in the short-term, but buyers and sellers â€˜still need to be mindful of the wider economic concerns’. Most positively, Zoopla believes that growth may slow down in 2021, but says it doesn’t expect house prices to fall before the end of next year.
Whatever happens, don’t forget that residential property is usually one of the safest asset classes (which means ‘type of thing you can own’). We agree with the mantra that ‘real estate is always good’, and prices almost invariably rise in the medium to long term. If you’d like to have a more in depth chat about what’s happening in the Maidstone & Barming market, please pick up the phone today.
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