Richard Freshwater, Director at Cheffins says:
“Lockdown #3 has brought with it a drop in the number of property valuations taking place as the number of sellers self-shielding and waiting for vaccinations increases. This has created a lack of new available stock in the market, particularly in the higher price brackets, which we forecast will bring with it a rise in property values. As valuations are currently down by around 20 per cent in comparison to January 2020, we are seeing increased competition in the market as there continues to be a ferocious appetite from buyers. As the shortage of supply is unlikely to be addressed until the vaccine roll out is in its later stages, frustrated buyers will continue to struggle to find the type of home which they are looking for. Until the demand vs supply equation is balanced out, competitive bidding is likely to increase causing inflated property values. It is also therefore possible that any deflation to the market caused by the end of the stamp duty holiday will be stabilised by an increase in prices, unless stock levels begin to rise.
The property market has held firm in comparison to the issues seen as part of the wider economy, especially as activity roared ahead from May onwards, and in fact, Nationwide reported annual house price growth finished the year at +7.3 per cent. Whilst looking into a crystal ball it is difficult to predict the behaviour of the market for this year, there is a very real issue with stock levels, particularly for the larger homes which tick all the boxes for buyers, especially those leaving London. Peoples reasons for moving are sure to continue, divorce, upsizing, downsizing and changes in lifestyle will all still be practical imperatives, as well as the hangover of buyers looking to escape claustrophobic conditions they saw during the lockdown periods. Last year saw astronomic levels of activity, with data from HMRC showing that 124,800 house sales were completed in November, which is almost 16,000 more than the average for the period, and consumer intelligence expert, TwentyCi, found that the number of agreed sales in December were 70 per cent above those last year. As momentum builds behind the calls to extend the stamp duty holiday, the Chancellor’s announcement on the 3rd March ought to help bring some clarity to how market trends might take shape throughout 2021. For us in Cambridge, we have an incredibly active buyer base looking for both city centre and countryside homes, all of whom are competing for the best properties on the market at the moment.”