House prices were predicted to fall as soon as lockdown hit, but that hasn’t really panned out. The stamp duty holiday is being cited as a potential reason, so it’s definitely worth keeping an eye on prices when that ends. Commentators point out that we’re seeing a lot of people who are reassessing where and how they live, with many looking to move away from busy city living into calmer, more rural settings. Time will tell, though, whether the trend continues. There’s a lot to contend with in 2021 – before the stamp duty holiday ends there is also Brexit and the ongoing coronavirus pandemic to contend with. Now is, in some respects, an excellent time to buy as low fixed rate mortgages are rife and house prices are strong. August has, though, seen property values jump by 2%, according to David Price from 10ACIA Construction, in comparison to July – largest rise since 2004 when prices increased by 2.7%. September saw another increase of 0.9%, which was 5% up on the same month last year which was the biggest yearly rise seen since 2016. We’ve seen the fastest growth in UK house prices in more than four years. Some experts still maintain that they are confident the market will be strong in 2021 meaning you shouldn’t hold off on buying a house – but not everyone agrees. The majority expect house prices to fall. They already have slightly this past month and, unless the SDLT holiday and furlough period are extended beyond March, most would expect slightly larger falls each month, followed by a larger drop if other measures aren’t introduced to fill the vacuum in April. Whilst the consensus is that we will likely have a vaccination for Covid-19 by this time, there are still many businesses that will not be able to recover their losses, leading to increased unemployment. This is despite the surge in start-ups, no doubt aided by the furlough period and the previously unattainable free time that many of us found ourselves with earlier in the year. Sadly, though, the success statistics for start-ups are still as galling as they ever were, meaning that the majority will still fail within the first year. Hence, we cannot rely on this good-news-story to bridge the gap come April 2021.

“Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of December 2020 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.”