Market Commentary – 2021 Budget

Budget Pre-Announcements

Housing Market Support

The Crash That Never Happened

The two major housing announcements in the 2021 Budget were not a surprise given the earlier leaks but the most important message from the Chancellor on housing remained unstated but clear. This was a budget to support the housing market and avoid the previously widely predicted housing market crash.

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Market Commentary – January 2021

End Or Extend

Non-UK Born Residents & Housing Demand

London Demographics

The end of the stamp duty holiday is rapidly approaching and there are widespread calls for an extension but the Chancellor is holding firm so far. An extension could help some buyers but risks creating further pressure on the housing market and will just delay any cliff-edge. Meanwhile, city centre rental markets are at risk from greatly reduced tenant demand due to fewer non-UK born residents with London looking worse affected.

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Market Commentary – 2020 Review

The Boris Bounce & Lockdown

The Crash That Never Happened & Housing Inequality

Stamp Duty Holiday & The Race For Space

What Happens Next

The housing market ended 2020 as it had started, with a boom in activity and prices. However, the rest of the year was rather more volatile thanks to the pandemic, but the much predicted bust never appeared. As we approach the end of the stamp duty holiday in March, there is considerable uncertainty about what happens later in the year. This note provides a brief review of the housing market in 2020 and looks ahead to what could happen next.

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Market Commentary – November 2020

Open For Business During Lockdown

Looking Ahead

New Housing Supply

The housing market stayed open for business during this second lockdown and the housing boom has continued. Activity levels and house prices look set to continue rising through to March next year but, as the end of the year approaches, analysts and commentators have turned their attention to forecasts. The range of forecasted outcomes reflects the massive uncertainties facing the economy and the housing market, and most are possible. Meanwhile, the latest net housing supply data from MHCLG tells us what was happening last year but little about the challenges that the housebuilding market is now facing.

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Market Commentary – October 2020

Summer Boom Leading To A Winter Rush

The Pandemic’s Second Wave

Tax Booms and Cliff Edges

The housing market boom is continuing into the autumn with sales agreed still well above last year’s levels and house prices rising. However, we’re yet to see the boom in sales agreed reach completion and there are growing concerns that many may not complete before the stamp duty holiday ends in March. Meanwhile, the second wave of the pandemic continues to grow and brings with it further disruption, challenge, and loss. This month’s commentary also looks back at previous tax booms and cliff edges as a guide to what might happen next year.

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Market Commentary – September 2020

What Happens Next?

The Politics of Planning

First Time Buyers Crunched

The housing market is booming, but how long can it last and will there be a crash? Last month we looked at what was driving the current housing boom. Now everyone is asking what happens next. The truth is no one knows given the widespread uncertainties. But you don’t need to be a superforecaster to identify some of the important events coming up in the next six months and assess what they could mean for the housing market. This note looks at these and also at growing political challenges facing housing – namely planning and home-ownership.

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Market Commentary – August 2020

Summer Boom – Why It Is Happening & How Long It Will Last

Local Fallout – Claimant Count Analysis

The housing market is booming but why is it happening and how long can it last considering the pandemic’s economic fallout? Every week brings news of rising prices and housing market activity but it also brings news of more job losses and other economic damage. This apparently contradictory situation suggests the housing market is disconnected from the real world but it is not particularly surprising given the inequalities in housing.

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Market Commentary – July 2020

Housing Market Recovery Stronger Than Expected

Stamp Duty Holiday Introduced Too Soon?

Transaction & Housing Supply Scenarios

The housing market may have been all but extinguished from mid-March to mid-May but it’s now running hotter than a typical British summer and the government has thrown on more fuel in the form of a stamp duty holiday to keep the fire ablaze. What remains uncertain and concerning is what happens when the backlog of activity delayed by lockdown fades and the full effect of massive shocks from Covid-19 and Brexit feed through. This note looks at the limited evidence so far, questions whether the government have gone too early with their stamp duty holiday, and presents our illustrative scenarios for transactions and housing supply.

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Market Commentary – June 2020

Market Bounces Back But How Much Is Just Delayed Demand

•Crash or No Crash, This Will Exacerbate Existing Housing Inequalities

The housing market has reopened in England and it appears to have ignored the last three months and taken off from where it was prior to the lockdown. There are numerous reports of high demand and the number of sales agreed rebounding back to normal levels. The lockdown is easing, the economy is slowly recovering, and house prices are rising. But this bounce is unlikely to last given the massive economic shock and on-going credit crunch in the mortgage market. Irrespective of the outcome, the current market will exacerbate existing inequalities.

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Market Commentary – May 2020

– The Housing Market Has Restarted But The Economy Is Stalled

– The Recession And A Credit Crunch Will Limit The Recovery

The housing market reopening for business last week was welcome news but caught many unaware, including the government. Restarting the housing market was always going to be a priority given its importance to the economy, so it is not surprising that restrictions have been eased as early as possible. Initial data suggests that interest from consumers has rebounded, though perhaps not as much as estate agents’ excitement. The market will almost certainly recover from the low levels of transactions reported in yesterday’s HMRC release but it will take time for delayed and new purchases to reach completion. Meanwhile, the economic data continues to worsen and the largest economic shock in recent history will limit potential buyers’ ability and enthusiasm for making the biggest financial decision of their life. The housing market may have restarted but the economy is stalled and there is a credit crunch limiting lending at higher loan-to-value ratios.

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