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Housing Market On Solid Ground in 2021

Published: 19/01/2021

2020 was a tough year for many industries and businesses across the whole UK. In terms of the housing market though, there is plenty to smile about at the end of what has been a turbulent 12 months, with one of the busiest years on record. Many predicted a downward spiral for house prices as a result of the pandemic, but the opposite has happened, with prices staying on an upwards trajectory.

The Scottish housing market remains strong as demand continued through the end of 2020 Q4 and into the new year. However, there is understandably more caution about activity beyond the first quarter of 2021. Gordon Macdonald, FRICS of Allied Surveyors Scotland Plc, in Aberdeen, said: “The market continues to be exceptionally active, against normal seasonal expectations. The balance of types of property in demand though is changing towards those in the country and property that is distant from population centres. Competition for certain, quality houses in the average price ranges is becoming more frequent.”

Alongside the pandemic related reasons for homeowners wanting more isolated living space, is the continuing climate crisis and the drive for ‘net zero’ which is fuelling an insatiable demand for land suitable for growing trees or plants. There are now many more people looking to potentially offset carbon emissions, whose focus when making their next move is to secure larger outside space in order to grow their own produce.

With the relative affordability of Scotland – where the average house price was £163,248 in October 2020 compared with the UK average of £245,443 – and the demand for rural living becoming more and more prevalent, we should see this demand continue to help push the market along. Many of the sales on the popular west coast of Scotland, were sold for £500,000 or less to a mixture of owner-occupiers and second-home purchasers.

In other good news for the industry, Zoopla announced a 70.5 per cent increase in Boxing day web traffic which is always a good indicator of how the market is likely to perform at the start of the following year, so to see such huge numbers of interested potential buyers is very promising. A contributing factor will certain be the national lockdown that is still ongoing, with more people at home having the time to look at what is on the market, not to mentioned revaluating if they have enough space during a period where the whole family is around.

Zoopla are also anticipating house price growth across the UK in 2021 to be around 1.0 per cent on average – this will run within a narrow range from 1.75 per cent in Scotland to just 0.5 per cent in the East of England and the North East.

Overall it’s not all doom and gloom out there, especially within the property sector. With the hope of successful mass vaccination and a rising trend in people looking to move home, as a year of homeworking has led people to re-evaluate their housing needs, there is confidence across the industry that momentum will continue into 2021.