2021 has been a tough year around the world, as we plant our feet firmly into the new year with a mask in one hand and a side flow test in the other, I wanted to reflect on what the past two years have meant for the property market. The early stages of the pandemic in 2020 forced us to live and work in a whole new way. The work-from-home revolution has highlighted the lack of adequate workspaces in most of our properties, the temporary closure of gyms and health centers has forced us to exercise at home and keep up Zoom classes, and homeschooling our children tested our internet connectivity and gave me the opportunity to reconnect with the split infinitive!
We are a resourceful nation and have set about converting garages into gyms, building wooden offices in the garden and improving our internet speeds. A stark realization for many was that they simply didn’t have enough space to live this way, so a deep wave of demand hit the market. Add to that a stamp duty holiday and this wave has turned into a tsunami with far from enough properties available to satisfy the number of people looking to relocate. So when we said goodbye to 2020 and welcomed 2021, we found ourselves in a very obvious seller’s market and it was no surprise that prices started to rise, and rise rapidly. Berkshire, like most of the country, has seen house price growth of between 10% and 14% over the past 18 months.
From the landlord’s perspective, government intervention with notice periods and the reluctance of tenants to seek alternative accommodation meant a lack of inventory entering the market and rental prices began to rise sharply. As we now have almost two years of life like this under our belt, it is interesting to see changes in the way properties are marketed and sold. Homebuilders have redesigned layouts to include home offices as standard, even in their smaller designs, broadband speeds are now a regularly asked question, almost pushing “is the loft on board?” out of the first place and the outdoor space (however small) is promoted more than ever.
Supply remains an issue for the sales and rental sectors, which should mean prices will remain resilient, with further increases widely forecast through 2022. While we have seen the Bank of England raise the base rate at 0.25%, the effect on most mortgages is negligible. This is unlikely to be the last hike, although any further increases are likely to be gradual and cautious. We have to remember that we are in an extremely low interest rate environment, so mortgages for residential and rental loans are still excellent value and likely to remain so for some time.
Hat and Home is an independent real estate agency with a nod to tradition and a nod to nostalgia. Our mission is to make moving a fantastic experience. If you need help with your sale, purchase, rental or lease, please write to us.