As the clock counts down towards the end of the Brexit transition period, the property market is still adjusting to the impact of and the challenges caused by the Covid-19 pandemic. Both hugely significant events in their own right, what will the impact of both be upon house prices? In this post, we look at London house price forecast beyond coronavirus and Brexit.
London to outperform the rest of the country
The government’s move to temporarily cut stamp duty has brought the market back to life. But with uncertainty lingering over both the pandemic and Brexit, could this boost be short-lived? Not in the Capital.
Research has shown that London will outperform the rest of the UK in 2021. House prices will remain stable whilst they are anticipated to fall by -1.5% across the rest of the country. Over the next five years, prices in the Capital are set to increase by 20 – 30%.
It’s expected that first time buyers will purchase in regeneration zones such as Thamesmead and Barking Riverside, whilst affluent families are expected to head to leafy suburbs like Barnes and Richmond.
The trend of Working from Home
The trend for working from home looks set to become the new normal. It’s likely that buyers will be looking to sacrifice commuter convenience as trade off for more space for home offices. This looks set to increase demand in some previously less desired areas.
Many employers are already weighing up the option of allowing more staff members to work from home on a regular basis so the possibility of more time out of the office will encourage homeowners to seek out more space.
Demand from overseas buyers looks set to increase
Demand from wealthy overseas buyers in the usual central hotspots of Mayfair, Knightsbridge, Belgravia, Kensington and Chelsea will trigger a market recovery. Historically, this is an area that consistently performs well post downturn.
The Brexit process hit the prime market particularly hard, pushing many ‘dream home’ prices downwards. Although there was a definite turnaround in fortunes earlier this year, COVID-19 has reversed this, sending these seven- and eight-figure homes south yet again.
Cash buyers will seize the chance to buy up this valuable real estate at low prices, so we expect to see activity increase in this sector after the initial downturn.
There is an already existing housing shortage in London. This has been made worse by the delay to builds due to the COVID crisis, mainly because of a supply issue with resource and materials. Such a shortage will force prices up.
Popularity of shared ownership set to increase
Shared ownership will increase in popularity in the coming years, predictions state. This allows buyers to part-own part-buy a property.
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