Savills has upgraded its UK house price forecasts for this year to growth of 4%, compared to its previous expectation that property values would remain flat in 2021. The estate agency predicts house prices are set to boom over the next five years, writes Thom Wilkinson, a Partner at solicitors Bishop & Sewell, specialising in Property and Environmental Law.
Last year in spite of the pandemic people’s desire to move house outweighed the uncertainty surrounding jobs and finances. Across the country Savills reported that prices rose 7.3%.
Lucian Cook, Savills’ Head of Residential Research, has been right for many years. Reported here, this year he is predicting, “2021 is going to be a complex and uneven year, with competing forces impacting the housing market at different points. But the outlook has improved since the beginning of the year given the speed of the vaccination programme, the expected relaxation of social distancing measures and government support for both jobs and the housing market.
“Real-time data tell us that new sales agreed remain well above the pre-pandemic norm, with the same true of mortgage approvals. That points to a strong first half which, together with the introduction of the mortgage guarantee scheme, underpins our expectation of 1.4m transactions in 2021.
“By extending both the stamp duty holiday and the furlough scheme in last week’s Budget, the Chancellor has significantly reduced the downside risks in the mid-year, while a recovering economy should support price growth towards the year end.”
In particular property prices in prime central London are also forecast by Lucian to rebound strongly, rising by 3% in 2021, 7% in 2022, and a total 21.6% by 2025.
Another development that helped the economy was the Government’s decision to extend its ban on commercial evictions until 30th June, now fast approaching. This granted those businesses that have been forced to close through periods of the pandemic some breathing space.
It’s tough on commercial landlords though, many of whom have financial pressures of their own.
Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), was reported here, saying: “After months of lockdown, this announcement provides much-needed breathing space to retailers impacted most by the pandemic, many of which are sitting on rising rent liabilities. Retailers have lost over £22bn of store sales during the three lockdowns, and the ban on aggressive rent enforcement is a vital protection against being pushed into administration by landlords. Where new rent plans have not yet been agreed, tenants and landlords must use this final opportunity to reach a deal before 30th June.”
The measures that are put in place after tenant protections end on 30th June, alongside the reform of business rates expected a few months later, will be an opportunity to reset and revive the landlord/tenant relationship.
As ever, if you would like to discuss any of the points raised in this article, please do get in contact. Thom Wilkinson is a Partner specialising in Property and Environmental Law and is contactable on Tel: +44 (0)20 4513 6073 or Email: [email protected]
About Bishop & Sewell LLP
Bishop & Sewell is a long-established, full service Central London law firm – with an international reach – specialising in Personal, Property and Commercial legal matters. To learn more, visit www.bishopandsewell.co.uk