In last week’s client briefing, we explained that March 2021 was the busiest month for Sales Agreed since our records began.
In this edition, as difficult as the task may be, we present an early view on what we expect for 2021.
But before we get there, let’s do a quick update on supply and demand, or technically speaking that should be demand and supply.
As we stated above, we know that March 2021 was the busiest single month of Sales Agreed since our records began in 2009.
April 2021 to-date is down on March and looks like a decline, but we have investigated this and it is just the Easter holiday effect.
We cannot compare Easter 2021 to last year as we were in Lockdown 1.0 throughout April, but a quick like for like comparison on the year before suggests that:
- Easter demand (Sales Agreed) is up 56% on 2019
- Easter supply (New Instructions) is up 7% on 2019
So, the market is still very buoyant.
Two client briefings ago, we were amongst the first to break the news that the property market was in danger of running out of stock to sell.
This recent trend continues in that the supply of properties (New Instructions) is simply not keeping pace with the demand levels in terms of the ratios we have seen in previous years from supply to demand.
The most likely outcome of this seller’s market is that we will see prices rising in the short-term.
Based on what has happened to all of us in 2020, we are not entirely sure that the word “prediction” is relevant, because of the difficulties involved in predicting anything since the pandemic started. However, our view is that:
- 2021 Transactions will rise from 2020 by around 15% and this will also exceed levels in 2019
Prediction is around 1.2million
- 2021 Sales Agreed will fall back from 2020 levels by about 8% and this is still ahead of 2019
- Prediction is around 1.2million
Crucially, our view is that the main action will switch back to mid to lower priced properties to drive demand post Q1 as the supply side opens up. This is as a result of the introduction of a new 95% mortgage guarantee scheme to help people buy a property with a 5% deposit (effectively this is 95% loan to value mortgages backed by Government).
- 2021 Instructions will be flat at 1.6m as they were in 2019 and 2020
Of course, it remains to be seen what actually happens in 2021, but so far it is looking good for people involved in the property market and our predictions are suggesting that this broad trend will continue. Let’s hope we are correct.