I’ve never seen a year like what we have just witnessed. Both from the changes in how the property market has transacted and the impact on prices, demand, and buyers changing requirements.
So why has the estate agent market in the UK performed so strongly, and have we entered a new arena?
Many assumed the markets around the UK would experience difficulties due to the pandemic and the subsequent lockdown, yet we experienced quite the reverse.
I believe we have had a perfect mix of elements, combining economic, political, and individual emotional factors, which has produced these results
Here are the key drivers as I see them:
- Political Backdrop: the markets have been suppressed since the June 2016 Brexit referendum, with people sitting on the fence and holding off the next house move due to uncertainty about how the post-Brexit landscape would look. Throwing an end of year General election into the mix maintained that suppression, and we saw lower than expected movement in the market for a 3 ½ year period.
- Economic Backdrop: With the City of London effectively being closed for business for 12 months has meant cost savings for commuters, including:
- Rent: A significant number of renters have moved back in with their parents
- This has enabled homeowners and potential first-time buyers to save a deposit for a new purchase.
- Individual Emotional Factors: During the lockdown, many became aware that their home was no longer suitable for their needs. They may have lacked outdoor space, needed an extra room to create a study, or simply the prolonged duration in their home made them realise they wanted a change. In addition, some unfortunates found their relationship didn’t survive lockdown.
- Sustained record low-interest rates. Mortgage rates have been at record lows with 5-year fix terms available (this picture is matched globally). This has enabled first-time buyers’ access to the market. Previously they hadn’t been able to. Those upgrading now find themselves able to take the plunge.
- Following the December 2019 General Election, the market started to pick up. The 3-month period to March 2020 saw good transaction levels, levels not recorded since before the Brexit Referendum. This activity was still there when the market re-opened following the government’s final hour announcement that estate agent offices could open the following day, 13th
- The government announced a Stamp Duty Holiday. Buyers were able to transact on a property and pay a significantly reduced amount of tax for the period 8th July 2020 to 30th June 2021
BTL for Beginners
Being a landlord is never easy. With so much legislation it is a really complex investment but if managed correctly it can be very profitable based both on income and capital value.
We are highly experienced in this field. We deal with both larger portfolio landlords and the first-time landlord. We understand that if it is your first investment purchase you need more information in order to make informed choices and this is why the video we have made is simply perfect if you are new to this.
We hope it is useful and please do not hesitate to contact us for any further advise you require.