Will Summer 2021 be an Exceptionally Busy Time for the UK Property Market?

Will Summer 2021 be an Exceptionally Busy Time for the UK Property Market?

Over the past twelve months, the UK property market has performed far better than many experts initially predicted. Paresh Raja, founder and CEO of London-based Market Financial Solutions, discusses whether this upward trend can continue through the summer months.

If current trends are anything to go by, it looks as though this summer could be a busy time for the UK property market. House prices have been rising at an impressive annual rate, backed by increased transactional activities and enquiries taking place.

Paresh Raja
Paresh Raja.

With Chancellor Rishi Sunak also announcing the Stamp Duty Land Tax (SDLT) holiday extension until the end of June, there is now a new window of opportunity for prospective buyers seeking to complete on a property transaction.

Part of the reason for this bullish outlook is the country’s handling of the COVID-19 pandemic.

The ongoing rollout of the vaccine means that social distancing measures could go by the end of June. However, we also need to be realistic about the situation at hand.

The news of a third wave of coronavirus cases in Europe could lead to restricted travel corridors. There is also the risk of the UK experiencing another spike in cases as lockdown restrictions are eased.

There is still plenty of reasons to be positive about the prospects of the residential real estate market. One only has to look at the sudden recovery and increase in buyer activity last year following Chancellor Rishi Sunak’s summer statement to see why I am optimistic about the future.

Based on figures from the Office for National Statistics, the average UK house price grew by £20,000 in 2020 – this is an 8.5% increase over the pre-pandemic prices recorded in 2019. This is an impressive growth rate, particularly given the modest rate of house price growth recorded in the years following the EU referendum.

While the rate of house price growth did drop in January 2021, the leading house price indexes also showed that this rate of annual growth was still sitting above 5%. What’s more, with the Chancellor announcing the Stamp Duty Land Tax holiday’s extension by three months during the 2021 Spring Budget in March, there has been an evident increase in domestic and international buyers seeking out new property investment opportunities.

Young homeowners unpacking following a house move

Preparing for the summer
The summer months are gearing up to be a busy period, and lenders are clearly taking note. At the beginning of 2021, Market Financial Solutions (MFS) secured over £350 million worth of funding to support growing buyer and broker demand for alternative finance. In doing so, MFS is now able to take on more applications and deploy loans within days of an enquiry being received.

Mortgage providers are also undertaking similar preparations. Since the 2021 Spring Budget announcement, we have been witnessing the slow re-introduction of 95% loan-to-value products. These types of mortgages were initially removed from the market when the first lockdown was introduced in March 2020.

At the time, mortgage providers and high street banks sought to minimise their risk exposure, meaning that prospective buyers had fewer financial products to choose from. This also compelled buyers to look beyond the high street and consider the benefits of engaging with specialist finance providers.

Across the country, property experts predict a busy summer 2021 in the UK

From what we see now, it looks as though the property market is geared up for a busy summer. Buyers will be looking to take advantage of the SDLT holiday before it expires on 30 June 2021. On top of this, the eventual lifting of COVID-19 lockdown measures means things could be returning to relative normality by the end of the summer.

The government understands the significance of the property market in bringing about the UK economy’s post-pandemic recovery. This is why temporary measures have been introduced to boost capital inflows into bricks and mortar. Lenders also need to play their part, ensuring buyers and brokers have access to the finance needed to complete on property transactions quickly.

Should this occur, we are set for a positive few months of house price growth and transactional activity.

Visit our dedicated property section for more news, opinions and guides on property.

Will Summer 2021 be an Exceptionally Busy Time for the UK Property Market? 2


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