March 2021: Market and Property Price Update
Last updated: 9.53pm, Monday 29th March 2021
Demand for property in the UK, and in Glasgow, is at a record-breaking ten-year high. How does is this effect you?
by Gordon Campbell
29th March 2021
- The UK is now started to a phased ease out of its lockdown restrictions
- The number of new reported cases and fatalities have been reducing quickly thankfully
- The hospitality sector is starting to re-open, restaurants, cafes and hotels.
- Construction sector and related businesses is business as usual.
- For Alliance Property Group it is business as usual.
- Every person and business we speak to or hear about is absolutely flat out busy and they have been in the last year, e.g. professional services, financial services, engineering businesses, garages, distribution and warehousing are a few examples.
- The UK has given first dose vaccination to over 31 million of the population as of today’s date.
- Nearly 3 million have now also had their second dose.
- James and I have had our first vaccination.
- The vaccination success in the UK should enable us to recover to some sort of normality sooner than later, and most importantly saving lives.
We continue to be very busy, and in the last year, on average 15 properties being sold every month.
Thank you to you all. We appreciate your business. It is truly appreciated.
Do not worry if you have not seen much coming through from us in the last 2 weeks.
We have been very busy in the background working on a lot of new deals, so watch this space!
Also with the high number of property completions and the refurbishments that we have on at the moment, it is important to create a bit of breathing space for us and our partnering teams, especially the refurbishments.
So bear with us in them taking slightly longer but all is in control and will be caught up very soon.
We do not want to dilute the high level of the service we and our partnering teams provide to you.
Property Market Update
Our recent and very detailed market update report blog last month - February 2021 UK and Glasgow Economic and Rental Market Update (click link to open)– gave an insight into the strength of the UK and Glasgow market over the last year for property sales and rentals at all levels of the market.
There was also another detailed blog earlier this year on the Economic, House and Rental Forecasts for 2021 (click link to open)
So what’s going on so far this year?
Demand for property in the UK, and in Glasgow, is at a record-breaking ten-year high!
Why is that?
2020 was the first time that house prices rose in a recession.
A lot of people put this down to the pent-up demand that from the lockdown measures and the Government's stamp duty holiday, which had prompted many to move.
As bad as things have been over the last year, one of the unintended consequences of lockdown is that it’s helped people save.
Any specific reasons as to why the continued demand?
Whether it’s not having to commute, spending less on eating out, holidays or even something as morbid as inheritance due to bereavement.
There seem to be a lot of tailwinds for the market, and with the benefit of hindsight, it’s no wonder house prices were up 8.5% last year.
Add the recent 95% mortgages, where the government will guarantee a portion of the mortgage over 80%, into the mix and there are now a lot more options for home buyers, especially first time buyers.
The extended stamp duty holiday doesn’t hurt either.
This means that on a £500,000 property the saving of up to £15,000 can become equity you can leverage, instead of just a tax expense, and people have been happy to pay more if you can just add it to the mortgage.
Any new predictions?
Savills predicts that the average UK property price is set to grow by 4% in 2021.
This was revised upwards from its previous forecast of 0%.
But with the Vaccine roll-out going better than expected and lockdown easing in the UK faster than anywhere in Europe, could this be still an underestimate?
According to Nationwide house prices increased by 0.7 per cent in February alone.
How does this recession compare to other recessions?
One of the interesting things about this pandemic recession is that the government support measures, like furlough, Bounce Back Loans, & CBILs.(Coronavirus Business Interruption Loan)
This has kept unemployment low and incomes have actually gone up.
This means while prices have been going up, the house price to earnings ratio has remained broadly the same as it’s been in the last few years.
This means that affordability remains roughly the same.
An economic recession doesn't always equate to a recession in asset prices.
Liquidity, credit and interest rates can be more important at times like we've just seen.
Note: There is an underlying global debt issue. Lots of various and different moving parts in this cycle we are in.
No one knows what lies ahead.
There is never a bad time to buy property.
As long as it is the right property, price, location, demand and accurate financials.
If you invest in property in the medium to long term it will serve you well and create you wealth and income.
There is more demand than supply. That is unlikely to change.
That is why what we do in offering you quality investments that are off market, below market value in the right areas, in this very strong market, combined with our 38 years’ experience and boutique personal service, is very very unique.
Alliance Property Group. Here for You. Making a Difference.
Gordon and James