2021 predictions

[APerson]

Ok lets kick this off: 

Factors increasing HPs:

• Work from home workers escaping the cities and moving to the suburbs/rural, increasing prices everywhere outside of the cities.
• Dodgy Bounce back loans being used for BTL or deposits on private
• Government always coming in with schemes to pump the market
  • Possibility of government backed 5% mortgages
• New immigration bill could mean that we get flooded with very cheap workers who would rent, causing a boom in BTL.
  • More well paid immigrant workers, particularly those from Hong Kong could buy and pump the market.
• Universal credit essentially offering a minimum monthly rent amount to land lords.
• Cheapest interest rates ever. 
• Very few investment opportunities due to the low interest rates but huge amounts of money printing meaning that money is chasing after assets that are limited in quantity such as property, gold, silver, bitcoin. 
• Government refusing to create any social housing and only granting planning permission for limited build plots to Tory donor builders.
• If masses of people are at risk of losing their houses Government would likely step in and do something to prevent this as it would cause political turmoil.

 

Factors decreasing HPs:

• Lending criteria is now very high, minimum 20% deposits.
• Huge Job losses that haven't even been fully released as furlough hasn't ended.
• I have heard from a Hungarian chap that he has observed many Eastern Europeans moving home in the last year as there aren't the opportunities that were available in the UK there once were, they also see London and major UK cities descending into chaos.
• Birth rate at an all time low - all population growth coming from immigration and descendants of those communities.
• Boomers holding a huge amount of the property in the UK and being at a stage in their lives where they might downsize - no one to buy from them.
• Land lords not being able evict as easily as before and not being able to claim interest as a tax reduction.

 

Overall prediction: 

I don't know. There are factors which clearly should push house prices down, however as the economy is on the verge of global collapse very strange things are happening such as the huge amount of money printing and crazy government schemes created to save the housing market. Housing still remains an asset in limited quantities. It's clear the banks and the elites would like to own all the housing and rent it to the people (see great reset, "you will own nothing and you'll love it"), but have to settle on owning it vicariously through huge loans and using petit bourgeois Land Lords as middlemen.

Despite this, we are looking at a huge amount of unemployment and a destruction of the middle class. I can't see a way that either side of the argument loses. It's like two trains in a head-on collision. Do they cancel each other out and house prices stay the same? Does one win?

I'm very interested to hear other people's predictions and if there are any other factors I've failed to consider.

My personal strategy is to go all in on Gold and Silver anticipating some sort of minor (or major) collapse of fiat and swap them for property at the right time. I don't know if this is the right option, but I'm in my mid 30's and my total assets are worth about £25k-30k so I see this as my best gamble to get at least something in the future. I currently don't have a job so I'm not in a position to use it as a down payment on a house.

Edited December 29, 2020 by APerson

[HovelinHove]

Well I would say that January is going to be a very good month. I phoned up to a view a house put on December 22nd, it had gone already. Same with another house.

I am stepping out of the market until the insanity has gone (if it ever does). It smells of a mania due to SD deadline. I am hoping things turn come February or March, but I know that Rishi ten homes Sunak will do everything he can to prop his own portfolio and those of his mates.

[captainb]

Where and what? 

If a house in Cornwall increases in value what does it matter if you are looking to buy a London flat and reverse. 

 

High end London flats to fall, FTB under 500k flats in London flat, communing towns falls, small rises elsewhere in % terms greatest in the cheapest.. See Blackpool % of BTL landlords. 

[HovelinHove]

On all the other points the OP mentions, very nice summary. There is something going on, a mania for assets, and the elite are in on this so they will do all they can to pump. I am in a very different position to you, almost completely cash for a purchase, and it’s scaring the hell out of me watching Bitcoin and property. I have about 20% of worth in Gold, but that seems to be just treading water at the moment. I would never put everything into Gold or silver...everything is just so insane, and unstable. There could be one more monster crash before the CBs give money to everyone directly through CB currencies. That will truly be the end of Fiat, but will they let you trade your Bitcoins for their digital currencies.

It is a very unpleasant time to be a “value” investor or house buyer, so different from what I expected back in April last year. The CBs and the governments have decided that they are happy to corrupt everything.

Edited December 29, 2020 by HovelinHove

[msi]

It's all going to s**t

We have social media stars giving share advice - are these the new shoe shine boys?

We have companies at insane valuations - is Apple really worth the same as every company in the FTSE combined?, Is Telsa worth more than Ford and Toyota combined?

We have Corporate welfare at insane levels (Bounce back loan fraud), yet sanction people to starvation level if they miss a job interview

Banks want to price risk, but central banks suppress this with QE and -ve IR

You have PPE and Br*xit contracts being given with zero oversight, a backroom bonanza

1/3 of the workforce on state support - with no glide path.  It's either extend-n-pretend or face a cliff edge of redundancies

Trading relations being made up on the hoof and for political expediency (Fishing over FS - give me a break)

COVID restrictions are dead in the water; 

• Government p*ssed away any moral authority with Cummings 'specsaver' visit
• Track n Trace is being ignored (and badged with the NHS to take the fall)
• The NHS was denied the breathing space and resources to prepare after wave 1 in April

 

 

 

 

 

[PeanutButter]

Overall, I expect UK house prices to be higher this time next year. 

As ever, monitor your chosen market like a hawk. And if you see value, don't dither. There is still value to be found, but it doesn't hang around. There may be a lull straight after the SD discount ends, that may be a good spot, but you would need to be ready for it ducks in a row beforehand. 

A semi needing full reno on my street sold for 1.3 in May this year (it's on land reg). They haven't touched it or moved in but if they put it to market today I could guarantee they'd get 1.5. And it would still be good value. 

 

[Huggy]

Because there is "no chance" of it happening in my head, I'll go for a nice high level 30% reduction in the land registry average for England. It seems like the right time to bet on things that "can't possibly happen".

NW and Halifax will be whatever they need it to be of course. Still positive YoY by Dec21 😉

[longgone]

1.5m for a semi good value LOL

[winkie]

Anyone who rents out their only home here could rent a better home somewhere else......and have money to spare , that is how insane it has become.......

[Notting Hell]

Whatever can be done to pump up house prices will be done. My thesis is further government intervention.

• SDLT relief <£500,000 will continue permanently: SDLT relief cannot be removed without wiping out HPI since 8 July and doing so will trigger a crash.
• SDLT relief for properties up to £750,000 inside M25
• 0% deposit government-backed mortgages
• government-backed fixed rate 35-year mortgages
• Leasehold reform (can no longer be avoided) triggered by the estimated two million affect by cladding issues

[winkie]

 

[LookingForLondon]

SDLT will probably have the biggest (or at least most obvious) impact on 2021. People will now start to reduce offers as they realise they need to pay stamp duty, and come March the chains will start collapsing when people in the buying process realise they will miss the deadline. This should contribute towards lower prices. I don’t think there will be a straightforward extension but possibly a taper of some kind I.e. extension for people with approved mortgage. I can also see a long term change to SDLT announced in the budget but that could go either way to increase or reduce it. Hopefully not increase... 

As the pandemic starts to pass due to the vaccine (fingers crossed) I can see people thinking they can get a bargain central London flat. People still want to live here as the fun stuff is still here (albeit temporarily closed), the offices will reopen. This will push prices back up for these properties. People who moved to the country will realise they hate it and head back to the city. 

Desirable houses will probably also increase in price as there have been none on the market recently and the demand will still continue through the year for wealthy people that are less financially affected by the pandemic and can still afford them.

Once furlough ends I expect a large amount of jobs will return as demand returns - albeit some areas will be more affected than others and places that closed down will take time to be replaced by new businesses. This won’t have too much impact either way on prices as the people most affected are largely renters who cannot afford yet to buy.

Having said that, renters may be increasingly unable to pay pushing BTL properties onto the market. 

I imagine Hong Kong residents coming to London will push up London house prices - probably not noticeably on a macro level but certain types of properties might be affected more depending on the buying preferences. If they are largely professionals/wealthy, the good quality houses will probably continue to go further ahead of mediocre properties. This is similar to what has happened this year, with average increases masking reduction in flats and massive increases in desirable houses. I have seen certain areas go up 20-30% (SSTC at least - they may be imaginary when chains start to collapse).

All in all there are so many things that could happen (or might not) that it is so hard to make a half sensible guess. The government is of course totally unpredictable as well which doesn’t help - government intervention is where the most impact will come from.

However, I don’t think prices will come down next year (as they go down more slowly than they increase in an environment where people are not forced sellers, as I expect to be the case next year, with low interest rates). They will probably increase a bit but not as much as this year.

 

[Unmoderated]

 

SDLT will probably have the biggest (or at least most obvious) impact on 2021. People will now start to reduce offers as they realise they need to pay stamp duty, and come March the chains will start collapsing when people in the buying process realise they will miss the deadline. This should contribute towards lower prices. I don’t think there will be a straightforward extension but possibly a taper of some kind I.e. extension for people with approved mortgage. I can also see a long term change to SDLT announced in the budget but that could go either way to increase or reduce it. Hopefully not increase... 

As the pandemic starts to pass due to the vaccine (fingers crossed) I can see people thinking they can get a bargain central London flat. People still want to live here as the fun stuff is still here (albeit temporarily closed), the offices will reopen. This will push prices back up for these properties. People who moved to the country will realise they hate it and head back to the city. 

Desirable houses will probably also increase in price as there have been none on the market recently and the demand will still continue through the year for wealthy people that are less financially affected by the pandemic and can still afford them.

Once furlough ends I expect a large amount of jobs will return as demand returns - albeit some areas will be more affected than others and places that closed down will take time to be replaced by new businesses. This won’t have too much impact either way on prices as the people most affected are largely renters who cannot afford yet to buy.

Having said that, renters may be increasingly unable to pay pushing BTL properties onto the market. 

I imagine Hong Kong residents coming to London will push up London house prices - probably not noticeably on a macro level but certain types of properties might be affected more depending on the buying preferences. If they are largely professionals/wealthy, the good quality houses will probably continue to go further ahead of mediocre properties. This is similar to what has happened this year, with average increases masking reduction in flats and massive increases in desirable houses. I have seen certain areas go up 20-30% (SSTC at least - they may be imaginary when chains start to collapse).

All in all there are so many things that could happen (or might not) that it is so hard to make a half sensible guess. The government is of course totally unpredictable as well which doesn’t help - government intervention is where the most impact will come from.

However, I don’t think prices will come down next year (as they go down more slowly than they increase in an environment where people are not forced sellers, as I expect to be the case next year, with low interest rates). They will probably increase a bit but not as much as this year.

 

I think London will stop taking such a kicking but it's days have been numbered for a while. Covid's legacy will be fast tracking the next five years trends in nine months. More remote working, more focus on your family and your little home/bubble than exactly where it is. Focus on work life balnace (the sheer number of people in my firm talking about how much they've loved being at home to put their kids to bed and then carry on working etc is crazy!)

London will always be London and attract those whose definition of fun revolves around any variation of drinking/drugs and paying more for that experience (half joking of course) - fair enough and each to their own but I think it has become intrinsically less desirable. 

[Rian1988]

Overall up 4-5% by end of the year. 
 

Flats will stagnate and maybe fall in real terms but larger desirable homes with space will bring up the overall average. 

[APerson]

 

SDLT will probably have the biggest (or at least most obvious) impact on 2021. People will now start to reduce offers as they realise they need to pay stamp duty, and come March the chains will start collapsing when people in the buying process realise they will miss the deadline. This should contribute towards lower prices. I don’t think there will be a straightforward extension but possibly a taper of some kind I.e. extension for people with approved mortgage. I can also see a long term change to SDLT announced in the budget but that could go either way to increase or reduce it. Hopefully not increase... 

As the pandemic starts to pass due to the vaccine (fingers crossed) I can see people thinking they can get a bargain central London flat. People still want to live here as the fun stuff is still here (albeit temporarily closed), the offices will reopen. This will push prices back up for these properties. People who moved to the country will realise they hate it and head back to the city. 

Desirable houses will probably also increase in price as there have been none on the market recently and the demand will still continue through the year for wealthy people that are less financially affected by the pandemic and can still afford them.

Once furlough ends I expect a large amount of jobs will return as demand returns - albeit some areas will be more affected than others and places that closed down will take time to be replaced by new businesses. This won’t have too much impact either way on prices as the people most affected are largely renters who cannot afford yet to buy.

Having said that, renters may be increasingly unable to pay pushing BTL properties onto the market. 

I imagine Hong Kong residents coming to London will push up London house prices - probably not noticeably on a macro level but certain types of properties might be affected more depending on the buying preferences. If they are largely professionals/wealthy, the good quality houses will probably continue to go further ahead of mediocre properties. This is similar to what has happened this year, with average increases masking reduction in flats and massive increases in desirable houses. I have seen certain areas go up 20-30% (SSTC at least - they may be imaginary when chains start to collapse).

All in all there are so many things that could happen (or might not) that it is so hard to make a half sensible guess. The government is of course totally unpredictable as well which doesn’t help - government intervention is where the most impact will come from.

However, I don’t think prices will come down next year (as they go down more slowly than they increase in an environment where people are not forced sellers, as I expect to be the case next year, with low interest rates). They will probably increase a bit but not as much as this year.

 

While I agree with much of what you've said, I think you're failing to take into account the state of the banking industry. I don't think we can return to normal. We're looking at a collapse of the middle class. 

 

...Covid's legacy will be fast tracking the next five years trends in nine months.

Deffo agree with this. 

 

We're entering a very strange situation where there will be huge amounts of extra money in the hands of a smaller number of people. This is unsustainable, something has to give, but at the moment I can't figure out what. 

The elites won't have a motive give up their money but the people won't be happy to be permanent wage slaves paying 60% of their income in rent and unable to afford a family, or live with huge mortgage payments for inflated house prices despite low interest rates. 

In terms of jobs and how money is supposed to move around the economy, I can't see how it works. The money wont circulate around an economy with no middle class, it will just pool into the hands of Landlords and Amazon. 

At the same time, the populace doesn't seem that interested in rebellion, and has been completely divided over non-economic issues like Brexit, BLM and culture war issues (perhaps on purpose to distract from the economic issues or to stop them from forming a united front). 

Does it all just grind to a halt and we end up with soup kitchens, UBI and people just sitting around watching Netflix?

[Timbuk3]

HPI to oblivion, due to this

https://www.businessinsider.com/uk-granting-five-passports-a-minute-hong-kong-residents-2020-12 

Until the UK residents start kicking off about it, which is never going to happen.

[shlomo]

10M unemployment by April

20% house price crash in London

Less immigrants

30% Decrease in GDP

Tier 5 Lockdown

 

 

[shlomo]

 

I have heard from a Hungarian chap that he has observed many Eastern Europeans moving home in the last year as there aren't the opportunities that were available in the UK there once were, they also see London and major UK cities descending into chaos.

 

I have heard the same things from Turks that you can no longer make money in the UK, so they are leaving en masse, there preferred way was opening restaurants which no longer works, contrary to what people say about immigration it was always because it was one of easiest countries for a penniless immigrant to become rich, that ships has now sailed.

Edited December 29, 2020 by shlomo

[Former postman]

London house prices collapse 15-20%

10% unemployment

Boris Johnson resigns

Tax rises

[APerson]

 

I have heard the same things from Turks that you can no longer make money in the UK, so they are leaving en masse, there preferred way was opening restaurants which no longer works, contrary to what people say about immigration it was always because it was one of easiest countries for a penniless immigrant to become rich, that ships has now sailed.

Yep, the other Turk business was men's barbers - although I suspected they were fronts as they only accepted cash, similar to Vietnamese nail salons (probably money laundering for the Vietnamese weed growers). 

Edited December 29, 2020 by APerson

[shlomo]

 

Yep, the other Turk business was men's barbers - although I suspected they were fronts as they only accepted cash, similar to Vietnamese nail salons (probably money laundering for the Vietnamese weed growers). 

If they were fronts then I cannot see a reason they cannot accept credit cards, they used to charge £10 for a haircut probably the CC fees were too high, they used to sell a chair, so you would have to pay £130PW for a chair and after that what you made was yours.

[Pmax2020]

 

Overall up 4-5% by end of the year. 
 

Flats will stagnate and maybe fall in real terms but larger desirable homes with space will bring up the overall average. 

I agree.
 

The stats will continue to be skewed by 30/40 something middle movers and savvy older downsizers. The FTB market will be dead in the water.

Rightmove will lap it up....

 

[jiltedjen]

- interest rates negative

- stamp duty holiday extension just before deadline

- a full year of covid with a smaller flair up in winter 2021

- beautiful summer

- bitcoin crash to $20,000 then rise to $80,000 October 2021

- gold up 30% by the end of the year

- houses up 30% (London flat only real terms falls there) 

- stock market wobbles as everyone’s realises that covid won’t be done quickly 

- we will all find out what happens with the vaccines after enough time passes, babies are born etc 

- furlough becomes less and less generous as marketed as ‘easing people into other sectors by easing off support’

 

[Martin_JD]

 

Overall, I expect UK house prices to be higher this time next year. 

As ever, monitor your chosen market like a hawk. And if you see value, don't dither. There is still value to be found, but it doesn't hang around. There may be a lull straight after the SD discount ends, that may be a good spot, but you would need to be ready for it ducks in a row beforehand. 

A semi needing full reno on my street sold for 1.3 in May this year (it's on land reg). They haven't touched it or moved in but if they put it to market today I could guarantee they'd get 1.5. And it would still be good value. 

 

This is the best advice in the thread.  There is still value, and if you can afford it go for it. 

I see a lull in the market once the stamp holiday ends, but overall prices will continue to creep up as the fundamentals remain - historically low interest rates and a lack of good housing stock.

[OnionTerror]

Non-tariff barriers will put massive downward pressure on services and areas such as manufacturing supply chains..