Thu 31 Dec 2020
Any estate agent (or frequent mover) will tell you there’s always change in the property market. It’s a sensitive sector, responding acutely to any social change or political upheaval. And 2020 has given us change and upheaval in spades. At the start of the year, house prices across England were just about recovering to pre-2007 financial crisis levels in February 2020. Although London recovered after two years and many major cities like Oxford and Cambridge within four, the rest of the country was trailing behind after the Global Financial Crisis (GFC) impacted the property market.
According to data from the Land Registry, it took until the summer of 2018 for the average house price in Swindon to recover its pre-2007 level. 2019 saw these prices stagnate and we were looking for an upturn for 2020. So to say COVID-19 was a cruel blow to the market is an understatement. However, to the surprise of the public and experts alike, it hasn’t been nearly as bad as we might’ve thought...
Looking back: The Impact of COVID-19 on the Housing Market in 2020
UK House prices jumped up by 7.3%. Research released from Nationwide has shown that the average UK house prices in December were up 0.8% month on month, and up 7.3% annually. This is the highest rate of growth in house prices for 3 years. This is closely tied with…
Demand being 34% higher than October 2019. These two points are likely linked to a huge change in circumstances for millions of us. Many in employment either lost their jobs or were asked to work from home (WFH), and many self-employed were forced to stop trading. Financial hardship, the freedom afforded by homeworking and commute-dropping, and revelations about homes, lifestyles and relationships prompted a lot of big decisions across the country.
Completed housing sales tallied at just 6% lower than last year’s numbers. Despite months in lockdowns – and the resulting upheavals, fall-throughs and backlogs – completion rate numbers for 2020 will have done surprisingly well by the time we reach December 31 with only 6% fewer completions across the UK.
Rents across the UK increased by 1.7%. This may have something to do with the fact that affordable mortgage rates were being squeezed, keeping demand for rental property high. Plus, those suddenly desiring office or garden space may have opted to rent to facilitate a quick, ideal living situation.
Rents in London decreased by 5.2%. This one’s a little less cryptic - scores of city workers no longer having to pay extortionate rents to be physically present at workplaces signaled an inevitable downturn in demand for London rental property. Why’s this important for the Swindon housing market? The London market is a significant indicator for us, and we’ll lead on to this in our forecasts section…
In Swindon, house prices across the board saw a price increase of 2.62%. According to data from Zoopla, for detached properties, it was a 4.92%, and for terraced houses, it was a whopping 6.86%. Now that’s a good year - and it correlates directly with increased demand for gardens, plot size, and outdoor space in general, which Swindon offers in abundance with its proximity to The Ridgeway, The Cotswolds, Lydiard Park, Stanton Park, and so on.
Looking forward: What can we Expect for Property in 2021?
The vaccine (hurrah!). For the past 9 months, buyers and sellers have dealt with fall-throughs and conveyancing turmoil, while residential landlords have dealt with locked-in tenants, rent holidays, and delays in court proceedings relating to evictions and rent arrears. But the arrival of vaccines heralds a likely return to normal for 2021. Despite expected job market volatility, we hope the worst should be over for the residential property sector.
Not so great for commercial landlords. The homeworking revolution and the huge impact on high street retail (which was already fighting a losing battle to online commerce) may mean we’ll never see a return to previous value and demand for commercial property.
Brexit – we have a deal! This one’s coming in high on our list because for a long time, the uncertainty of leaving without a deal was perceived as one of the biggest threats to the housing market for 2021. Fortunately, a deal has been agreed at the eleventh hour which has removed (to an extent) this barrier for the first quarter of 2021. It has bought more breathing space until at least the end of the stamp duty holiday in March…
The remainder of the stamp duty holiday. Up to 100,000 additional home sales are predicted for Q1 before Rishi’s celebrated stamp duty deal comes to an end, signaling a strong start to the year. However, now government has now ruled out any extensions so we are likely to see a slowdown in the quarters after this as buyers may choose to ‘wait and see’ how the market reacts.
Economic outlook. The impact we’re seeing on the housing market is lower than previous economic downturns, as sales volumes have already fallen in line with the tightening of affordability criteria of recent years, even though the market has sustained house price growth. However, the short-term extension of furlough and mortgage holidays provides important support for the first quarter of 2021. Beyond this, the market will depend on how the pandemic evolves and the policies put in place to manage it and support the job market.
Mortgages. Although the post-lockdown outlook for the housing market has been surprisingly rosy so far, there is one crucial casualty - banks have tightened the purse strings for mortgage buyers. 95% mortgages have all but disappeared, and in August 2020, Nationwide limited parental contributions to 25% of a deposit. With lenders wary of buyers with high loan-to-value mortgages losing their jobs, the first-time buyer market (which constituted 36% of sales in 2019) may struggle.
Changing priorities. Somewhat unsurprisingly, a YouGov survey taken in August 2020 revealed that Brits are now switching up their new home wish-lists to include offices (for homeworking) and gardens (in the event of further lockdowns). 32% of buyers say having a garden is now more important, 14% would settle for a balcony or terrace, an office is more important for 29%, and 26% have a new desire to be near parks or nature. This has been supported by further research from Nationwide who have concluded “Our research earlier this year indicated increased demand for less densely populated locations and different property types. This helps to explain why detached properties have seen greater price gains in recent quarters, while flats have underperformed.”
What does all this mean for the Swindon Property Market?
The recent data suggests that people are seeking more natural, rural lifestyles and space. For the first time in the lives of many, they are not bound by proximity to urban centres, motorway entrances or train stations. There are also much more emotional aspects at play - the global pandemic has forced many of us to reconsider our career choices, our family situations, the hobbies and passions we rediscovered in lockdown, the threat of ill health and even mortality, and what really matters to us.
The significant mindset change puts countryside counties like Wiltshire in the spotlight. Swindon in particular offers an appealing bridging of the gap between urban and rural life, with an amenities of town living, fantastic communication links and quick access to the fields and forests that surround it.
Swindon’s proximity to parks and AONBs as mentioned above will be attractive to individuals, families, and investment buyers alike. Many cross-country movers - especially higher-earning buyers from big cities - tend to rent initially in order to relocate quickly and simplify their future conveyancing process, so we can speculatively assume that rental rates will hold strong in Swindon, as they are across much of the country.
HOW MUCH IS YOUR PROPERTY WORTH?
If you're considering selling in 2021, we have been helping people sell their homes in Swindon for over 24 years. We pride ourselves on providing honest and reliable advice so to get a FREE valuation, please contact Chris Dewhurst on 01793 701111 or firstname.lastname@example.org
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