Rightmove’s last house price index of 2020 forecasts a 4% price rise in 2021 despite the new year bringing significant levels of political and social uncertainty.
2020 has seen house prices rise by 7%. in an extraordinary year, one for the history books, many predicted demand, and therefore prices, would plummet as a result of the Covid-19 pandemic, but against all predictions (apart from the one from in-house property expert, Russell Quirk, who correctly predicted this price boom back in April) the housing market is thriving.
‘That Teflon-coated housing market I talked about back in April,’ Russell says, ‘the one that I forecasted would remain strong and wouldn’t yield to the pesky virality of Covid: yes, it’s still there and it’s still looking good.’
Now, with eyes on 2021, Rightmove says growth is going to continue, predicting a further 4% rise in house prices.
This optimistic outlook comes despite continuing Covid uncertainties, the likelihood of a post-Christmas virus spike, an all-but-certain no-deal Brexit, and the end of the government’s stamp duty holiday.
How can a housing market continue to thrive in times like this? Because, Rightmove says, none of it is going to knock moving home off the top of the agenda for many people. This will help demand stay ‘resilient’ throughout the upcoming year.
In fact, Rightmove suggests that this rise is going to happen regardless of what happens with Brexit and regardless of whether or not the stamp duty holiday is extended beyond the current 31st March deadline.
On releasing this most recent price index, Rightmove said:
‘Pandemic related uncertainties have been around for nearly a year, and Brexit uncertainties for far longer, and record activity month after month has proved that movers are willing and able to act on their new or existing housing priorities.’
As for market resilience after the stamp duty deadline, Marc von Grundherr, director of estate agents Benham and Reeves, said: ‘While the end of this initiative will lead to an understandable drop in demand over the months that follow, it will be more a return to pre-pandemic normality rather than a dramatic market crash.’
In other words, the 4% rise being predicted for 2021 is the rise we should expect to see in a ‘normal’ year. Tim Bannister, Rightmove’s director of property data, calls it a ‘more conservative’ forecast when compared to what we’ve seen in 2020.
This year’s 7% rise is extraordinary, the result of extraordinary world events and equally extraordinary reactions and contingency methods. Next year, we return to normality – hopefully – and the market will resume its natural rate of growth.
The most important takeaway from this is: the current boom we are seeing in the housing market is not going to lead to a 2021 slump – the market is not going to crash. When compared to the doomsday predictions we were getting from experts earlier this year, we now see just how resilient house buyers can be and how vital they are to the continued strength of the UK economy.