East London House Prices 2021.
1st December 2020
1st December 2020
From Chingford to Canning Town, Wanstead to Wapping. House price predictions for East London in 2021
It’s the 1st of December. Christmas music is on the radio, many of us have the tree up and it’s time for the annual house price predictions (or should I say fingers in the air) for the London housing market.
As we enter the final weeks of 2020 and stare into the crystal ball, we’re still seeing the effects of the post lockdown ‘mini-boom.
But uncertainty is lurking around the corner. Several factors are at play market forecast for 2021 relies on several factors.
1. Buyer Demand.
The strength of ‘pent-up demand’ surprised many when the lockdown lifted. Demand, especially for quality family homes with outside space in Highams Park, Forest Gate, Wanstead will continue to be resilient.
Flats in generic blocks where supply is high - Stratford and Canary Wharf will I’m afraid continue to see weaker demand especially if outdoor space is lacking.
2. Stamp Duty Holiday.
The Government’s initiative undeniably played a huge part in keeping the market afloat this year. But what will happen once the scheme ends in March 2021?
In my view, if ‘Dishy Rishi’ doesn’t get his cheque-book out again then vendors will have to adjust their asking prices downward.
If there are no noises on this front from the Chancellor come January then I suspect the market will stall and look for direction. It’ll be a Mexican stand-off between sellers and the Chancellor. Who’ll blink first?
I suspect a lack of available stock will support muted growth of around 2% for 2021. But again, it’ll be the family homes with outside space, near schools and green space that will perform better.
In fact, flats in off-piste locations without outside space could see prices ease until some sense of ‘normality’ returns to our lives.
3. The Availability Of Mortgages.
Lenders have understandably become stricter against a more challenging economic background, especially for those with a 10%-15% deposit. To get the best selection of mortgage products, a staggering 40% deposit is required these days.
On the other hand, existing homeowners are experiencing a once-in-a-lifetime opportunity to re-evaluate how and where they live.
With many desiring more space, a move out of London and the chance to buy during a stamp duty holiday. Those that ‘once upon a time’ were happy to stay put and pay off the mortgage are now supporting rising activity in the market.
Almost 30% of my East London clients left London in 2020. I expected this trend to continue through 2021.
4. UK Economic Outlook For 2021.
There’s no denying that the finances of UK PLC are under strain and we’re yet to feel the impact of Brexit. Hopefully, common sense will prevail and a deal can be reached as a ‘No Deal’ would blow a hole in everyone’s predictions.
5. Unemployment Rates & Property.
Oxford Economics predicts the UK economy to contract by an unprecedented 9.7% in 2020. It’s hoped that any increase in the unemployment rate will be short-lived to prevent the property market from catching fright. A rising unemployment rate will naturally lead to keeping the lid on prices rising.
6. Interest Rates & Property.
Interest rates have a complicated effect on property investment but long story short – rising interest rates make purchasing more expensive and reduce the availability of mortgages. However, with central banks around the world printing money and borrowing like there’s no tomorrow, the expectation is for interest rates to stay lower for longer acting as an ongoing prop for prices.
Areas I expect to outperform.
Highams Park, Central Park (East Ham), Leyton, Victoria Park, Wanstead and South Woodford.
Areas I expect to underperform.
Canary Wharf, Stratford & Wapping.
Property should always be viewed through a long-term lens. Will you be able to buy in 2021 and sell at a profit in a year or two? It’s doubtful. My advice is to buy a home that you believe will be suitable for at least 5 years.
The days of endless property price double-digit property price rises are likely on hold perhaps that’s perhaps no bad thing.