2021: What is in store for the property market?

Published 22nd December 2020

We have seen many updates and changes in the property industry over recent weeks. From heightened calls to extend the stamp duty holiday following the statement released by the Treasury, to the return of high loan-to-value mortgages to market, it has been far from a quiet month. With the end of 2020 in sight, many are speculating on what this could mean for the industry as we head into the new year.

Calls to
extend the stamp duty holiday are still being heard

The
market continues to react to the news that there are no plans for an extension,
or tapering, of the stamp duty holiday. Following the statement issued by the
Treasury, many homebuyers feel concerned about the progress of their
transactions. With reports that almost a third of buyers will pull out if they
miss the deadline, the effect that this could have on the market is uncertain.
However, calls for an extension, or tapering, of the planned stamp duty
deadline, are still being heard. Many are looking to the Chancellor to allow
more transactions to benefit from the tax savings, through either an extension
or tapering of the deadline. These calls look set to continue into the new year
as the 31 March deadline draws ever closer.

LTV’s
come back to the market

There is
good news for homebuyers, as high loan-to-value mortgage deals come back to the
market. New products are available from lenders such as Barclays, NatWest, and
many more. With the options multiplying, there is now a variety available for
buyers with small deposits looking to get a mortgage. As market demand is still
high following the first national lockdown, more options will enable more
people to move home. The number of products has increased drastically during
December, which is a positive sign for the market as we move into the new year.

New Tier
4 guidelines introduced

The
introduction of Tier 4 has left many parts of the country in disarray. In these
areas, socialising with members of other households is off-limits. You may only
leave your home if you have a legitimate reason. These include going to work,
the shops, and moving home, to name a few. While the news that home moves can
still take place being well received, there are strict guidelines to be
followed. Viewings are still allowed to take place where relevant social
distancing and PPE measures are adhered to. Removal firms can still enter
properties, but it is advised that those outside of an individual bubble do not
help with the move. Guidelines are being updated regularly and with more areas
preparing to go into tier 4, it is advised to follow updates from the Ministry
of Housing, Communities and Local Government if you have a move underway.

What do
these changes mean for the property market?

The stamp
duty deadline is now only a few months away and concerns for the market are
growing. Many are looking to the government to protect the transactions that
are already underway, which risk falling through if they cannot benefit from
the tax holiday. However, there is also positive news for the market. Even in
Tier 4 locations, the housing market can remain open, and more high
loan-to-value mortgages are becoming available. Keeping the market stable is
key as we go into the new year. Home Legal Direct’s Director, Oliver Meddick,
shared his thoughts on the future of the market:

“While
there is a massive focus on the stamp duty deadline, I can still see huge
optimism in the marketplace, with lenders easing criteria and more increasing
their loan-to-values. So, while many will feel the stamp duty deadline is an
issue, in my opinion so many more are wanting lenders to allow them to buy,
which will see a flood of buyers returning to the market. There is more
long-term value in the ability to borrow money and buy the property you want in
an upwards pointing market than the short-term gain of stamp duty relief.”

Contact
Home Legal Direct

Home
Legal Direct is here to guide and support you throughout the course of your
transaction. As the future remains uncertain, our dedicated team of advisers is
here to answer any questions you have along the way. Contact us today!