It’s probably a safe bet that most people just want 2020 to be over. They will soon get their wish. What’s more, Brexit notwithstanding; there are some signs that 2021 may be a better year, especially for the property market. Here is a quick round-up of the latest developments.
Buyers (and sellers) are back
A graph of the property market over 2020 essentially looks like a giant U. It plummeted, literally to nothing, during lockdown. Since May, however, it has been staggering back onto its feet. Now it appears to have found a rhythm.
This is probably partly thanks to the Stamp Duty holiday and partly thanks to having found ways to work in a pandemic environment. Hopefully, once the former ends, the latter will ensure that the property market stays functional.
HS2 appears to be going ahead
The case for HS2 was always that its economic and environmental benefits would outweigh its upfront cost and the environmental damage caused by its implementation. If you accept this case, which Boris Johnson clearly does, then nothing has changed.
The only question was whether or not the government would remain committed to paying for the rail line given how much the pandemic has already cost.
Preparatory work is going ahead so the answer would appear to be yes. Boris Johnson appears to be gambling that the stimulus will be worth the cost. HS2 is set to make a huge difference to the housing market, particularly in the Midlands and North.
Even though it will be years before the line is active, the expectation of its arrival (and the work it generates) could stimulate local property markets long before then.
“Green Homes Grants” could help landlords improve their properties
Currently, residential rental properties have to have a minimum energy rating of E. Scotland has already indicated that this will be upgraded to D in 2022 and other parts of the UK will likely follow suit, albeit not necessarily to the same timetable.
Landlords might therefore want to see if they can take advantage of these grants to improve the energy efficiency of their rental properties.
Interest rates are at historic lows and may go negative
If you qualify, financing is currently super-affordable and could become even more affordable. This certainly isn’t the first time there have been rumours of negative interest rates. Up until now, those rumours have always been proven to be just that, rumours. Currently, they still are.
They are, however, rumours which are being taken very seriously by the financial media and for good reason. COVID19 looks set to be a fact of life until at least 2021. It could even go on beyond that. Sadly nobody knows for sure. Brexit is on the way. Again, nobody really knows what that will bring. It is, however, almost guaranteed that there will be at least short-term disruption.
Currently, it’s hard to see any way that the Bank of England could increase interest rates. It is, however, quite straightforward to see why they might take the view that “desperate times call for desperate measures” and experiment with negative interest rates. This would be miserable news for savers but could be great news for (potential) borrowers.