2021: what next for house prices?

According to building society Nationwide, house prices climbed 7.5% last year, the highest growth in UK house prices for six years.

Why was demand for property so high in 2020?

Buoyed by a range of Government policy measures, demand for housing remained high throughout 2020. Changing preferences resulting from the pandemic – including the desire for more space to accommodate working from home – also contributed to a high demand for residential property. The stamp duty holiday also stimulated demand by bringing forward home buyers plans.

In addition, the furlough and Self Employment Income Support schemes provided support for the labour market whilst measures such as payment holidays helped to keep the cost of borrowing down and the supply of credit flowing. Some lenders returned to 90% loan-to-value offers, providing a much-needed lifeline for first-time buyers.

Our property departments in Brighouse, Halifax and Huddersfield - and the team at Boococks, our Halifax based estate and lettings agency – have all remained very busy throughout 2020, helping people throughout Calderdale and Kirklees to move home.

Housing market outlook for 2021 remains uncertain

However, whilst demand for housing has remained unexpectedly buoyant throughout the pandemic, the outlook for 2021 looks somewhat uncertain.

According to Robert Gardner, Nationwide's chief economist, "Much will depend 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."

All this is taking place against a mixed backdrop of rising unemployment, low borrowing costs and a continuing shift in people’s living arrangements as employees adapt to remote working on a more formal and long-term basis.

The widely held view is that the Stamp Duty time limit (currently 31 March 2021) has created a false environment. As things stand, demand – and therefore prices – are likely to cool off in the spring, especially once the stamp duty holiday expires. And although the Government has confirmed the Stamp Duty deadline of March 31 will stand, a U-turn is entirely possible.

Wilkinson Woodward are specialists in property law, including:

• buying and selling residential property
• shared ownership
• right-to-buy
• buy-to-let
• tenancy agreements
• property management
• general property work

Please contact our offices in Halifax, Brighouse or Huddersfield if we can help.