Leeds Property Market Update January 2021

2020 was a tale of two distinct halves for the housing market. Following a strong start, the first half was dominated by the panic caused by COVID-19, with the market grinding to a halt due to the COVID restrictions, and prices down 0.5% at mid-year. However, during the second half of the year, house prices increased as a result of pent-up demand, a desire amongst buyers for greater space and the time-limited incentive of the stamp duty holiday. In fact, average house prices continued to rise in December, stretching the current run of continuous house price gains to six months from June!

Now, in the wake of the third national lockdown, the Leeds property market has remained buoyant. However, with the rise of a new strain of virus sweeping the country and the government holding off on announcing any future stimulus packages, the economic outlook is somewhat muddier. The state of the housing market will also depend on how people feel once the stamp duty holiday end and the impact of the furlough scheme coming to an end in March.

What we do know is that investing in property is a long-term endeavor. While there has been a small reduction in the demand for properties, the main challenge at the moment is the lack of properties on the market. In part, this is the result of the stamp duty holiday, which encouraged vendors to bring forward their selling decisions last year, but also because of the current lockdown, which is putting off vendors from marketing their properties and risking multiple viewers coming and going throughout the weeks.

In general, we expect some mild downward pressure on house prices throughout the year, as unemployment gradually increases, and believe it will be a good time for investors to get into the market.

Rightmove House Price Index Jan 2021

Sales Update

In January, we would typically expect there to be lots of new properties coming to the market as people make New Years’ resolutions to finally sell and move home.

Unfortunately, due to the nationwide lockdown, parents juggling a job and homeschooling have had little time to even think about putting their home on the market. We are not viewing as many properties as we usually would at this time of the year, but the properties that we are viewing, we are offering on and are having our offers accepted.

It is too early to say how this will affect our timelines for sourcing and purchasing properties for our clients, but given that the property market is still open, we don’t expect any major issues.

Mortgage Update

From a mortgage perspective, the sentiments from last month remain true. Mortgage offers are taking a little longer to come through than we are used to. Valuations are still being allowed, and the bottleneck is being caused by less active staff available to deal with the incoming applications at the lenders end.

While the mortgage interest rates for purchases in personal name have decreased to a low of 1.6%, the rates for limited company purchases seem to have increased slightly. And despite a potential for the Bank of England to vote to reduce the base rate from its already low 0.1%, we don’t believe that lenders will pass on this rate reduction to the consumer anytime soon.

Lettings Update

Unlike the sales market, the lettings market has remained strong in January. After being couped up at home for months, despite lockdown, people seem to want a change of scenery and are on the look-out for their next home.

So far, in January, we have tenanted 3 properties, with a further 2 expected to be tenanted by the end of the month! With properties being rented within a couple of weeks we don’t currently foresee any slowing down of rental demand.

2020 was a tale of two distinct halves for the housing market. Following a strong start, the first half was dominated by the panic caused by COVID-19, with the market grinding to a halt due to the COVID restrictions, and prices down 0.5% at mid-year. However, during the second half of the year, house prices increased as a result of pent-up demand, a desire amongst buyers for greater space and the time-limited incentive of the stamp duty holiday. In fact, average house prices continued to rise in December, stretching the current run of continuous house price gains to six months from June!

Now, in the wake of the third national lockdown, the Leeds property market has remained buoyant. However, with the rise of a new strain of virus sweeping the country and the government holding off on announcing any future stimulus packages, the economic outlook is somewhat muddier. The state of the housing market will also depend on how people feel once the stamp duty holiday end and the impact of the furlough scheme coming to an end in March.

What we do know is that investing in property is a long-term endeavor. While there has been a small reduction in the demand for properties, the main challenge at the moment is the lack of properties on the market. In part, this is the result of the stamp duty holiday, which encouraged vendors to bring forward their selling decisions last year, but also because of the current lockdown, which is putting off vendors from marketing their properties and risking multiple viewers coming and going throughout the weeks.

In general, we expect some mild downward pressure on house prices throughout the year, as unemployment gradually increases, and believe it will be a good time for investors to get into the market.

Rightmove House Price Index Jan 2021

Sales Update

In January, we would typically expect there to be lots of new properties coming to the market as people make New Years’ resolutions to finally sell and move home.

Unfortunately, due to the nationwide lockdown, parents juggling a job and homeschooling have had little time to even think about putting their home on the market. We are not viewing as many properties as we usually would at this time of the year, but the properties that we are viewing, we are offering on and are having our offers accepted.

It is too early to say how this will affect our timelines for sourcing and purchasing properties for our clients, but given that the property market is still open, we don’t expect any major issues.

Mortgage Update

From a mortgage perspective, the sentiments from last month remain true. Mortgage offers are taking a little longer to come through than we are used to. Valuations are still being allowed, and the bottleneck is being caused by less active staff available to deal with the incoming applications at the lenders end.

While the mortgage interest rates for purchases in personal name have decreased to a low of 1.6%, the rates for limited company purchases seem to have increased slightly. And despite a potential for the Bank of England to vote to reduce the base rate from its already low 0.1%, we don’t believe that lenders will pass on this rate reduction to the consumer anytime soon.

Lettings Update

Unlike the sales market, the lettings market has remained strong in January. After being couped up at home for months, despite lockdown, people seem to want a change of scenery and are on the look-out for their next home.

So far, in January, we have tenanted 3 properties, with a further 2 expected to be tenanted by the end of the month! With properties being rented within a couple of weeks we don’t currently foresee any slowing down of rental demand.