London property market forecast 2021
So you’re wondering “how will the property market look in 2021?”. You’re probably asking yourself “should I invest in property this year or wait yet another year?” or “Will the market crash?”. Hopefully in this article, we can give you insight on where the property market in 2021 is headed and what we think is going to happen.
Let’s take a quick look at what happened in 2020
After the first lockdown, much like everything else on the market, there was a pent up demand for property. People had to wait, wait and finally all at once come out and look for property. This situation caused a backlog of buyer and very low inventory of properties on the market. It soon changed the market from a Buyer Market to Seller Market.
Small businesses had access to loans and grant schemes made available by the government. The government had also eased the burden on businesses through their furlough scheme. This also meant that employees did not have to be laid off. All of which contributed to what happened to the property market in 2020 and why the “property bubble” did not burst as many had predicted, year upon year!
What will happen to the property market in 2021?
There are many factors that can go into what will happen this year and I’m going to give you a few big factors will contribute to what will see this year in the future!
Reason’s why we may see a dip in the property market!
Stamp duty holiday coming to an end on the 31st of March (slows down sales), meaning many investors may be more reluctant to invest due to this burden.
Small businesses are going bust despite government support which means an increase in unemployment, which would mean that less people are able to invest and therefore it would lead to less competition.
Large businesses are also finding out that they can stream line their businesses by reducing their workers while keeping the same level of productivity and therefore cutting their costs. Furlough is also coming to an end so employers will be more encouraged for reducing staff. This further increases the unemployment.
The banks offered huge loans during the pandemic, albeit with a very low interest rate, these loans are to be paid. This further reduces the amount of money available for buyers.
Reason’s why we may see a rise in the property market!
The government is printing huge amounts of money, reducing the value of the pound. With more money available, property prices will rise. However we should note that this does not mean the VALUE will rise, but the PRICE it self.
Stamp duty holiday EXTENSION!? Yes, currently stamp duty is expected to be coming to an end on the 31st of March, however there is a big chance that the government will extend this. IF this is the case, many buyers will be more inclined to make investments in the property market.
Currently, the government has a scheme in which first time buyers can purchase a new home with a 5% deposit, the government is now however planning that this scheme will be extended to first time buyers for second hand/used properties as well! This will introduce a lot more buyers, creating more competition for properties and increasing their prices.
Is the property market coming to a crash?
Our thoughts, we think the market will plateau towards the end of the year and neither go up nor down!
However if you’re looking to invest into property this year but you’re not quite sure, we have some final thoughts we can share that may aid your decision. If you want a prediction of the future, here it is, the next 10 years will be pretty much like the last 10 years. Yes, the next 10 years will be like the last 10 years. Forecasters have been predicting a crash year upon year and it never materialises, in fact it never will over a long term period. Year upon year, the value of property has risen risen. Another important thing to note if you’re looking to go into property is to not try and time the market. You’re not Nostradamus, you can’t see into the future, so don’t try to! Instead what you should focus on is the investment and trend long term.
The best time to buy a property was yesterday, the second best time is now.
By: Omar Safi
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