The 7 pillars of Wisdom – Things to consider as we begin 2021
We talked to Giles Barrett, who made a video summarising all the available research to date across several areas. Here we list, in brief, his 7 pointers. See his live comments on Instagram @giles_barrett.
First up is Vaccine progress. The speed of the roll out will determine how quickly restrictions in movements, and therefore activity in key sectors of the economy, can be relaxed.
We expect an economic rebound in 2021 supported by a suite of government support, but unemployment is expected to rise towards 6.5% and income growth to be muted. A mixed economic outlook.
The Trade Deal with the EU. How will the result impact the property market? Whilst many will argue over the quality of the deal struck, most will be agreed that ‘a’ deal is better than ‘no’ deal when it comes to the housing market. That said, there is a cautionary note – the announcement saw the pound surge to a two and a half year high. If this surge continues, overseas buyers may face the twin effect of a stronger pound and higher rates of stamp duty from April due to the introduction of a 2% surcharge. In the main though, good news.
There will be high LTV mortgages. We expect lenders to return to higher loan to values in 2021. This will create more buying opportunities for first timers.
Mortgage payment deferral and forbearance. If there is continued support from lenders there will be less forced sellers. Of course, if there is less support, there will be more.
Will there be higher rates of capital gains tax for second home owners, or even a wealth tax for those households with assets over £1m? Any of all of these changes will have a bearing. March 31st is also a key date as it marks the end of the stamp duty holiday.
Lastly, but critically, lifestyle changes and evolved working practices will have a significant effect prompting us to think about where and how we want to live.
Giles Barrett – Sales Director