Well, the forecasters got it badly wrong last year, but who would blame them for that? This year, they have more of an idea of what the market is confronted with, but these are uncertain times. Nevertheless, a few industry professionals have stuck their neck out...
A year ago, the property market seemed predictable. An initial flurry due to the 'Boris Bounce' followed by a fairly steady but unspectaclular year.
Had the economists and property companies known what was coming, it is unlikely they would have forecast the rollercoaster ahead. As we went into lockdown, the predictions were dire. Headlines shouted a property market crash. What we saw instead was the biggest surge in prices and activity for several years.
So what happens next? Here are the thoughts from some of the major players -
A standstill is Savills' view, forecasting a marginal rise of 1% for London, with the rest of the UK at 0%. “We do expect the economic effects of the pandemic to weigh more heavily on the housing market next year,” said Lucian Cook, head of residential research.
2022 is when they expect the market to move again, with rises of 6%. led by the North and North West.
Headline writers focused on Halifax's prediction of a 5% drop in house prices in 2021. What they actually said was "Prices are expected to fall by between 2% and 5% next year, although forecast uncertainty is much higher than usual given the current economic and political environment. It is also important to note that such a fall would only partially reverse the almost £18,000 (7.6%) increase in average prices experienced over the past 12 months."
Certainly the most bullish of our forecasters, Rightmove foresee the 'race for space' continuing beyond the end of the stamp duty holiday, with householders prioritising changing needs over rising prices. Given that many of these movers are seeing a rise in the equity in their properties, this may not be a bad call.
Rightmove's prediction - prices up 4%.
Nick Barnes, head of research at London based Chestertons feels that the positives and negatives in the market will balance each other out. He does not feel Brexit will have a significant impact as interest rates remain low and banks are keen to lend. He goes on to say "There is still a large number of buyers in the market with the financial strength and confidence to move; this includes foreign buyers who are likely to return to the market in significant numbers."
His forecast - national price growth to slow to 1.5%, Greater London down by 2%.
Knight Frank make the point that the biggest rise in unemployment since the start of the pandemic has been amongst the 16 to 24 year old demographic. A harsh reality and extremely difficult for those affected, but these are not property market participants. They further point out that sectors such as finance, government and science are examples of sectors that have added jobs this year.
2021 forecast - up 1%
According to their most recent report, Zoopla think that "while market activity is being boosted by latent demand unlocked by the pandemic, the housing market is not immune to economic forces and rising unemployment.
"We expect house price growth to slow to +1% by the end of 2021 as demand starts to weaken over 2021 H2. The number of completed housing transactions will be buoyed by a strong Q1 with sales agreed over 2020 Q4 completing early next year."