Why should you invest in property in 2021?
In short, the measures recently introduced and extended by the government are set to encourage significant market activity, allowing a large number of buyers previously excluded by deposit requirements and growing house prices to get onto the property ladder, and offering savings to investors, meaning now is an excellent time to get involved.
The stamp duty holiday provides investors with the opportunity to establish/expand their property portfolio whilst making significant savings on upfront costs.
The 95% scheme, which allows a wider range of prospective buyers to have better access to affordable mortgages, will push purchasing activity higher, adding further value to properties, and keeping the market afloat. The furlough scheme also ensures rent can be paid and provides the opportunity to save for a deposit, making it feasible for a larger percentage of the population to have access to the property market, whilst maintaining demand in the buy-to-let market in the meantime.
The significance of location
Knight Frank has suggested that the pandemic has caused many prospective buyers to reconsider their criteria when it comes to purchasing properties, with a considerable number of people looking to “escape the country” (according to registration figures collected at the end of 2020). Some buyers will have no need for transport links to cities/urbanised regions, criteria of purchasing a second home, people looking for retirement locations and those who simply are moving within their rural environment that are looking to upgrade, say, from renting to buying. As a result of this, investors looking to source locations and expand their portfolios might take rural areas into consideration.
This shift does not rule out the value of urban investment. Those looking to urban areas should take into consideration that properties in the cities and towns often prove to be highly profitable, depending on how populated the area is: larger populations tend to have bigger job markets and local opportunities, a wider range of transport options (which both saves money and acts as a more eco-friendly alternative), a better quality of properties and easy access to popular amenities such as supermarkets.
Despite these predictions, for many, including those affected by the pandemic and first-time buyers, factoring in location seems to have lost its relevance in 2021, as people are more concerned with getting on the property ladder and/or finding their forever homes than temporary lodgings. So, whether it’s rural or urban, a property will essentially sell itself on the current property market, supporting the idea that the market is set to boom this year.