In my opinion however, there is no getting away from the fact that this most recent Budget has been hugely positive for the housing market and all its stakeholders.
Indeed, what a difference we have seen pre- and post-Budget.
For instance, there was a considerable amount of nervousness around the stamp duty holiday deadline, the potential for a large number of transactions to fall through if they missed it, and a subsequent cliff-edge drop in activity.
The Budget has swept that away with the holiday extension, the three-month taper period, plus other measures such as the guarantee to allow lenders to return at 95 per cent LTV levels.
If you’d like an idea of what those measures have done, then read the Capital Economic housing market forecast post-Budget.
Effectively, 2021 now moves from a potentially worrying scenario to a positive one; Capital Economics was previously suggesting drops in house prices as a result of significant levels of unemployment during 2021 driving forced sales amid diminished demand.
It is now saying transaction volumes will be higher than anticipated and the cliff-edge scenario effectively consigned to history, as demand will be maintained and even grown throughout the rest of 2021.
This will be particularly so as lockdown measures are eased, and the great ‘race for space’ as it calls it, grows with people willing to move and purchase more quickly.
Now, Capital Economics suggests house prices will rise by three per cent this year, and 2.5 per cent next.
It also anticipates a quicker economic recovery based on vaccination levels and such, which would mean unemployment peaking at six per cent, rather than its former prediction of seven per cent.
Landlord demand growing
This change in economic forecasting – and this is not just the preserve of Capital Economics but others – has effectively been brought about by the government recognising the issues apparent in the housing market, and producing solutions to the problems that exist.
Many have railed against the stamp duty holiday extension and the taper, but it was absolutely necessary given the time it is taking to get transactions through to completion.
It also gives new purchasers a potential window to make a stamp duty saving, should they wish to enter the market now.
This is as relevant to landlord purchasers as it is residential borrowers.
We have already seen a boost in activity from landlords who might well look at the economic environment, tenant demand, property availability, and conclude that all works in their favour in order to add to portfolios.
We always believed 2021 would present a good year for property stakeholders – that belief has only been increased by the Budget.