{"id":15719,"date":"2021-06-22T04:15:00","date_gmt":"2021-06-22T04:15:00","guid":{"rendered":"https:\/\/eodishasamachar.com\/en\/2021\/06\/22\/uk-holmes-london-property-market-2021-mid-year-review\/"},"modified":"2021-06-22T04:15:00","modified_gmt":"2021-06-22T04:15:00","slug":"uk-holmes-london-property-market-2021-mid-year-review","status":"publish","type":"post","link":"https:\/\/eodishasamachar.com\/en\/2021\/06\/22\/uk-holmes-london-property-market-2021-mid-year-review\/","title":{"rendered":"UK Holmes: London Property Market 2021 Mid-Year Review"},"content":{"rendered":"

\n<\/p>\n

<\/p>\n

HONG KONG SAR – Media OutReach<\/a>
\n– 22 June 2021 – With the UK experiencing the worst health crisis in a century
\nand the greatest economic contraction in 300 years, it was astounding to many
\nthat the Office for National Statistics (ONS) reported that national house
\nprices climbed 7.8% by the end of 2020. Heading into 2021, other factors have
\ncome to stir the market, including the Stamp Duty Land Tax (SDLT) holiday, the impact
\nof a third lockdown, and the after-effects of Brexit. With so many points of
\nuncertainty and conflicting forces affecting the UK Housing market, UK Holmes<\/a>
\nprovides a London mid-year market review for an overview of the price action.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

London Growth Lags National Indices: A Tale of Two Cities<\/b><\/p>\n


\n <\/p>\n

In March, London was identified as the UK region with the lowest annual
\ngrowth \u2013 for the fourth consecutive month. The year-on-year data reveals UK
\ngrowth on a firm upward trajectory whilst the price curve for London is
\ntrending in the opposite direction.<\/p>\n


\n <\/p>\n

\u00a0

\nAnnual house price growth for UK and London:<\/p>\n


\n <\/p>\n\n\n\n\n\n
<\/p>\n

Region<\/u><\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

Jan 2021<\/u><\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

Feb 2021<\/u><\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

March 2021<\/u><\/p>\n

\n <\/td>\n


\n <\/tr>\n

<\/p>\n

UK<\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

8.0%<\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

9.2%<\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

10.2%<\/p>\n

\n <\/td>\n


\n <\/tr>\n

<\/p>\n

London<\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

5.6%<\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

4.4%<\/p>\n

\n <\/td>\n

<\/p>\n

 <\/p>\n

3.7%<\/p>\n

\n <\/td>\n


\n <\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n


\n <\/p>\n

The London market is essentially running at two speeds; Inner London
\nboroughs which have a high concentration of flats have been languishing as
\nbuyers push further out in search of greater space and better value for money,
\nwhile the outer London boroughs which feature a higher proportion of detached
\nhousing with gardens have experienced stronger growth.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

The ONS data for London revealed that in the year to March 2021, the
\nprice growth for flats was just 1%, lagging well behind terraced properties
\n(7.2%), semi-detached (6.2%) and detached (5.3%). <\/p>\n


\n <\/p>\n

\u00a0<\/b><\/p>\n


\n <\/p>\n

Government Stimulus Programs: Will the Boom turn into a Bust?<\/b><\/p>\n


\n <\/p>\n

One of strongest triggers which sent sales activity into a frenzy was
\nthe SDLT holiday, providing up to \u00a315,000 tax relief on a property purchase of
\n\u00a3500,000. With the UK having experienced three lockdowns due to the pandemic,
\nthe government had no choice but to extend the furlough program and other
\ninitiatives supporting businesses and the self-employed. Despite the SDLT
\nholiday due to expire at the end of March 2021, the housing industry
\nsuccessfully lobbied the government to extend this deadline to September on the
\ngrounds that the long delays in buyers reaching completion would result in
\nthousands missing out on the tax saving. <\/p>\n


\n <\/p>\n


\nAs history has shown, government intervention in the
\nhousing market has often led to distortions in the balance between supply and
\ndemand leadings to booms and then busts. The valid concern is whether this time
\nwill be any different.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

A Sharp Rebound in Economic Performance<\/b><\/p>\n


\n <\/p>\n

Whilst the 2020 real-estate bull market gave every impression of being
\nunhinged from the broader economy due to government stimulus efforts, this
\nstate of affairs is unlikely to prevail over the longer term. The UK economy is
\nhighly dependent upon consumer spending and, with the easing of lockdown
\nrestrictions, high frequency indicators of economic activity including motor
\nvehicle traffic, retail footfall and restaurant bookings have increased.[1]\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

The reason for this sharp rebound in economic activity and consumer
\nconfidence is down to one key factor: the success of the UK government’s
\nvaccination program. By early June more than 75% of the national population had
\nreceived at least their first jab. This encouraged the BoE to upgrade its 2021
\nGDP forecast to 7.25% in early May, a substantive increase on the 5% it had
\nforecast just three months earlier. With the economy performing better than
\nexpected, GDP in April was 3.7% below the pre-pandemic level in February 2020,
\nthe smallest gap since Covid-19 reached the UK.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

Consumer Sentiment and Market Shifts<\/b><\/p>\n


\n <\/p>\n

The first quarter saw annual house price growth surge to a seven year
\nhigh. Knight Frank established that in the month of March a string of decade-long
\nrecords were broken, including the highest number of new prospective buyers
\nregistering, the highest number of offers accepted, and the fourth highest
\nmonth for property viewings.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

Aside from the government stimulus, the reasons for the market hitting
\nthese 10-year highs can be traced back to consumers’ changing preferences. Out
\nof the lockdown experience emerged the key home-buyer preferences for size, space
\nand mobility – larger homes, outdoor space, and increased mobility as the daily
\noffice commute became redundant. The experience of home becoming a place of
\nwork, home-schooling, and exercise prompted residents in central London to
\nmigrate to outer boroughs or the home counties in search of an enhanced
\nlifestyle and better value for money.<\/p>\n


\n <\/p>\n

\u00a0 <\/p>\n


\n <\/p>\n

Market Direction and Best Buying Opportunities <\/b><\/p>\n


\n <\/p>\n

With optimism that the worst of the pandemic in the UK is behind, UK
\nHolmes reports that the economy is on track to rebound sharply. A survey of
\nleading economists by Bloomberg forecast that the UK will lead the recovery
\namongst major European nations with its fastest growth in almost half a
\ncentury.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

One of the biggest issues influencing the direction of the London
\nproperty market is the tapering and withdrawal of the SDLT Holiday, which up to
\nthis point has driven demand as buyers rushed to beat the deadline. Should this
\ndemand collapse at the point where increased supply is coming onto the market,
\nthere is the very real risk that prices will fall.<\/p>\n


\n <\/p>\n

\u00a0<\/p>\n


\n <\/p>\n

UK Holmes believes that the next 6-12 months will offer astute investors
\nin London property excellent buying opportunities. The inner-city areas are
\nbeing reinvigorated by strong growth in the retail and hospitality sectors and
\noffices are reopening. The market for flats, heavily depressed over the past 12
\nmonths, won’t remain in the doldrums permanently. However, UK Holmes is also
\nfirmly of the opinion market volatility
\nwill remain for some time. This will cause buyer’s remorse for those who fail
\nto fully understand the fast-evolving market dynamics.<\/p>\n


\n <\/p>\n

\n
\n
\n

[1] Bank
\nof England, Monetary Policy Report, May 2021<\/p>\n<\/div>\n<\/div><\/div>\n\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

HONG KONG SAR – Media OutReach – 22 June 2021 – With the UK experiencing the worst health crisis in a century and the greatest economic contraction in 300 years, it was astounding to many that the Office for National Statistics (ONS) reported that national house prices climbed 7.8% by the end of 2020. Heading …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[60],"tags":[],"_links":{"self":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/15719"}],"collection":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/comments?post=15719"}],"version-history":[{"count":0,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/15719\/revisions"}],"wp:attachment":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media?parent=15719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/categories?post=15719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/tags?post=15719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}