Experts Take on The 2021 Housing Market

The Housing Market, in the last few years, has been often challenged by Brexit issues. But this year has been a tumultuous ride for the industry. It has experienced a complete halt in operations due to the pandemic. And then, after reopening, it experienced a record high boom in sales.

With data coming in from the last months, experts now are weighing in on what to expect next year and the years to come.

Head of Research at Hamptons International, Aneisha Beveridge, said: "The housing market's strong start to 2020 soon came to a halt with the rise of COVID-19. But after seven weeks of lockdown, the market began to recover quickly.

"The market was buoyed by pent-up demand going back to 2016 as well as a rise in the number of households making lockdown-induced lifestyle changes, all topped off by a stamp duty holiday. We believe house prices are set to rise across Great Britain and will end 2020 having picked up from where they started at the beginning of the year.

"But the real challenges won't be felt until 2021. The economic consequences from the COVID-19 induced recession will pull the housing market from its long-term growth trajectory. While some economic recovery should have taken place to cushion the withdrawal of government support, we still expect the housing market to slow next year.

"In line with a gradual economic recovery, we forecast house prices to rise again in 2022 and 2023. The housing market will fall back in line with its historical cycle, with northern regions expected to see the greatest price growth, further closing the gap with those in the south."

Another research and consultancy group, The Centre for Economics and Business Research, weighed in on the 2021 housing market. They predict for next year that there will be a 14 per cent fall in house prices.

Many believe the housing market boom currently enjoyed is temporary and will eventually dissipate. Factors behind the market boom, such as the release of pent-up demand after the lockdown, and the government stamp holiday, are all seen as temporary.

The Financial Times predicts a sharp downturn in the spring of next year (not the winter of this year) as they listed several factors:

·     The end to government's furlough scheme will increase the unemployment rate. Chancellor Rishi Sunak introduced a new job support scheme that is receiving heavy criticism from Labour. It is not set to cover an estimated 3m workers currently in the furlough programme.

·     The payment holiday imposed by the government was designed to help struggling homeowners to keep up with payables. However, it is set to end on October 31. There is a growing fear that lenders can now repossess homes.

·     Brexit issues that are unresolved. The UK and EU are working on a trade deal before the transition period expires. But there still many matters to iron out. Without a deal, the economy will be affected.

However, as pointed out by Hamptons, should these trends continue, the UK Housing Market and Economy will make some gains and stabilise by the end of 2021.