London property market resilient one year after lockdown
- 31st March 2021
- Buying Property News
As the dark clouds of lockdown begin to clear, the London property market has a bright 2021 ahead
As we pass the one-year anniversary of lockdown, there’s no doubt that the past twelve months have been challenging and eventful in equal measures. However, as lockdown restrictions begin to ease and workplaces prepare to reopen in H2 2021, the London property market is expected to prosper.
Mortgage applications for London properties in December 2020 rose by 31% year-on-year to reach the highest monthly total since 2016. The extension of the Stamp Duty holiday until the end of June 2021 has helped more buyers to get onto or move up the property ladder. The decision to taper rather than suddenly end the holiday should provide even more encouragement to prospective buyers later in the year.
These reasons are likely to push homeowners, who had been considering putting their home up for sale already, into a switch. Remote working is unlikely to go away completely and continued homeworking could encourage more people to take the plunge and relocate as they seek additional desk space for working and study. As we enter the warmer months, properties with gardens are expected to be in even higher demand.
The introduction of 95% Government-backed mortgages for first-time buyers is another cause for optimism. So far, mortgage providers including Barclays, HSBC and Lloyds, have signed up to the scheme that will begin in April 2021. This will provide a big boost to first-time buyers who might otherwise have struggled to get on the property ladder due to rising house prices and hesitancy from mortgage providers after the 2008 financial crisis.
The rental market has endured ups and downs over the past twelve months. The fall away of the Airbnb market, coupled with a hybrid form of working for many Londoners and the shift towards online learning at universities, stifled demand with many tenants temporarily leaving London. These factors, along with the virtual closure of the retail and hospitality sectors further restricting employment opportunities has resulted in a decrease in rents. However, as the clocks go forward and the sun shines over London once again, the last few weeks have seen an equivalent number of online tenant registrations compared to last year. This suggests that as the vaccine rollout continues and the roadmap to recovery accelerates, the capital has lost none of its appeal amongst renters.
During the first lockdown, video tours became an effective way of allowing prospective buyers and renters to virtually view properties, from the comfort of their own homes. The success of these tours means they are likely to remain a way of showcasing properties.
Stephen Ludlow, Chairman at ludlowthompson says: “The London property market has overcome the myriad of challenges in 2020. The reopening of sectors of the economy will be a boost to the rental market, as bars and restaurants attract more young professionals to the city.”
“Government measures, such as the extension of the Stamp Duty holiday and the 95% mortgages initiative, should see high levels of activity in the market sustained over the coming months.”
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