As we all know the property market was basically closed for three months due to the outbreak of the Coronavirus. This has obviously led to a lot of uncertainty about the property market with many people expecting a drop in prices over the forthcoming months.
So, what do expect to happen in the market in 2021? It was announced last week the UK have entered a recession with statistics identifying the economy crashed by 20.4% from April to June the worst figures since 2008.
The reasons for the recession are simple Gross Domestic Product (GDP) plunged as for obvious reasons less money was spent in all industries. Furthermore, output from our factories etc fell overnight when the Country was put in lockdown. Generally value’s in anything fall when unemployment rises and because of this demand drops. Its down to these reasons that we saw property prices drop significantly in 2008.
When the pandemic hit the initial fears were the market was going to suffer the same impact however has this has not been the case since the market re-opened.
Here at FastMove and a number of other companies involved in the industry have announced strong figures in sales agreed over the last few weeks.
Our Managing Director Christian Armitage recently stated ‘In the last month we have agreed the highest amount of agreed sales over the last 6 years month to month, which is incredible given what has happened in the Country in the last 3 months.’ He went onto say ‘It’s because of this high demand the industry has actually seen an increase in house prices whereas everyone was convinced we were going to see the opposite. The levels of interest in people moving home may not just be down to the market been closed for three months, it may also be down to people realising they want something different from their property.
However, the famous saying goes all that glitter is not gold, and this maybe the case for the industry at the moment. Although we are seeing SOLD boards going up by the minute the question has to be how many of these sales will actually complete? I suspect a large percentage of the agreed sales will actually fall through, the main reason down to buyers not being able to obtain funding.
We speak to mortgage brokers all over the Country on a daily basis and the majority of them are finding things really tough. Since Covid-19 there is no doubt lenders have tightened their criteria significantly, for example larger deposits are now required and self-employed applicants are being scrutinised to levels brokers have never experienced before. However, it’s a case of taking each day one at a time and we all have to keep going and stay positive’
Whilst things appear to be a lot better than predicted do people think prices will drop in 2021? Although no one has a crystal ball many economists expert prices to fall over the next couple of years with many expecting the main drop to occur once the government furlough scheme ends and people are left to paddle their canoe independently.