Optimism over investment: Why 2021 could be a great year for property investors
It is safe to conclude that 2020 was a year that no one will forget in a hurry. The extraordinary changes that took companies, customers, and investors totally by surprise seemed to have no end. Of course, the root cause of this instability was the Covid-19 pandemic, which is still wreaking havoc all across the world.
Now, past the first quarter of the year, things are beginning to improve, at least here in the UK. The country is easing out of its third lockdown gradually, and with multiple Covid-19 vaccinations available and a relatively high takeup of them, it is looking more like we are getting back on track.
One thing that many people in the world of finance are turning their thoughts towards is how property investment will pan out in the remainder of this year as we move into a post-Covid era.
Stability and growth
Interestingly, despite the upheaval and uncertainty of 2020, the property market stayed relatively stable throughout the pandemic, and in November, actually reached its highest point in terms of growth since 2015. This was a positive end to an otherwise tough year financially for many people, and also signalled the end of a period of stagnation in the UK property market.
Will this last?
Of course, the question is now whether this period of growth will continue throughout 2021 and beyond. Potential investors will be wanting to keep a close eye on things as they look to buy property from developers such as Salboy.
Many economic experts forecast that not only will 2021 match last year but will exceed it in terms of increases in property prices. Back in December, Rightmove predicted a four per cent rise in the growth of house prices in the next year. This is thought to be one of the many lockdown knock-on effects. Everyone spent so much time at home last year that they are more than a little fed up with their existing homes and are desperately looking to upsize, upgrade or look for properties with bigger or better gardens, just in case we see any more lockdowns in the future.
Of course, the pause on stamp duty has also been an attractive prospect and perhaps persuaded people who were not intending to move at this point to do so. The holiday for stamp duty is set to end on the 30th of June, with a staggered payment increase until it is back to normal in September. We can assume, therefore, that th property market will remain on a high until that point.
What about financing options?
This may be the sticking point for many. Many UK lenders have withdrawn their mortgage products or have considerably tightened their processes around mortgage applications and who is eligible for them. It is taking longer than normal to process applications, and it is thought there is a higher than usual rejection rate, so this is something to bear in mind.
Is 2021 likely to be a good year for property investors? We think so, particularly for cash buyers!