What a difference a year makes:
With the pandemic ostensibly becoming more manageable due to our fantastic vaccine rollout, for many, the future is looking bright, and as confidence in our economy continues to grow, so does the forecast that house sales and house prices will also continue to grow, implementing a positive upward trend for the mortgage market. And there are several reasons to back this sanguine prediction.
Government Support:
The UK Government’s support of the Stamp Duty Holiday, 95% mortgage Scheme and Furlough has enabled the housing market to maintain stability, and many people taking advantage of these initiatives has seen a rise in demand for property purchases (up by a potential 34% from the same time last year) but with this demand outweighing the number of properties actually available, there has also inevitably been a surge in house prices. And until the supply of housing can meet the demand, this rise in house prices (about 5.7% at the moment and anticipated to increase consistently over the next few years) is forecast to remain well into the near future.
Digital Transformation:
With lockdowns having required that the doors to estate agents remained closed for many months, and the viewing of prospective homes being off-limit, the only way forward to retain the property market was for estate agents to invest in digital transformation. This technology (with councils being awarded £1.2m in innovation funding from the Government) would allow the sales of properties to continue through a computer-generated process, from planning applications and construction to virtual property viewing, and the capacity to be able to sign contracts on-line. This new digital initiative has enabled the housing market to thrive and will, as seen across many other sectors, allow the entire process to continue to operate remotely and more efficiently both during and beyond the pandemic, promoting and sustaining an incessant upward curve in mortgages and house sales.
A new way of living:
Working away from the office and spending more time working from home (which is likely to remain for many, even when the pandemic is over) has propelled people to re-evaluate their living space. With a desire to increase their standard of living, with a larger and greener outdoor area, especially those who have been cooped up in small flats or houses for months on end, and a need for extra room to accommodate ‘office’ space, for both privacy and necessity, properties which allow such home improvements are increasingly being sought after. And this expectancy for homes to deliver more, speculating that the price curve will continue to rise, will be an important strategy for the Mortgage market in 2021 and beyond.
Up, Up and Away:
When the Stamp Duty Holiday ends at the end of September 2021, it’s expected that those homeowners, who having purchased a property during the pandemic with the aid of the Stamp Duty initiative, will continue to be in a stable enough position to continue with their mortgage repayments, having been strategically checked prior to them being accepted to take on a mortgage in the first instance. And the 95% Mortgage Scheme which is due to run until December 2022, will definitely continue to draw in prospective buyers, who wouldn’t ordinarily have been able to afford to get a mortgage, whilst at the same time, with the Governments backing, sellers can be confident that with this scheme, should any buyers deflect on their payments, the seller will be covered.
All in all, with a promising economic growth, predicted, the job market optimistically heading for a recovery, and people’s confidence on the rise, all accumulating to encourage positive activity within the housing market, the prospects are looking great, with mortgages and re-mortgages set to remain on the increase.