It could be seen as a fool’s errand to try and make any sense or prediction related to the economy over the next twelve months. We are currently in the midst of national lockdown 3.0 with the new virulent strain of Covid 19 rampaging across the country. It would be reasonable to feel very bleak regarding the prospects for the year ahead. Although Ashtons as a business takes a more optimistic position.
After all, the EU trade deal was finally agreed prior to Christmas, the biggest vaccination roll out in history is gathering pace and there is a real chance of something akin to normality being achieved by late spring. If the record growth in GDP during Q3 2020 is anything to go by, we should expect a very strong rebound in the economy later this year despite the country re-entering a recession at the end of March.
What is the foundation for our optimism?
In March 2020 before the impact of Covid-19 was fully understood, the Conservative government ended austerity - announcing £130 billion of spending. During the first lockdown there was a significant focus directed towards businesses offering Covid relief loans and the much-needed furlough scheme, benefiting employees significantly. In total, nearly £400 billion of new money was created in 2020 with the chancellor promising an additional £150 billion this year. Never before has the government been so invested in the property market and steps such as the stamp duty holiday and keeping the property market open throughout lockdown tells you how much significance Great Britain PLC places on the housing market.
Since the introduction of the Help to Buy Scheme in 2013, the government has lent over £16 billion to buyers using the scheme and seen the purchase of over 270,000 homes. With an average of £60,000 invested in each of these sales the housing market is crucial to the long term bet the government has placed on the housing market. If the housing market continues to grow then so does the investment.
My team and I have undertaken a comprehensive analysis of the new build market in Hertfordshire and for the first six months we forecast a significant downturn in the number of new homes available in 2021. To demonstrate the number of new homes placed to the market in the first two weeks of 2021 is 73% down on this time last year yet the number of buyers registered is up on this time last year!
Creative developers will be able to mitigate the end of the stamp duty holiday by attractively incentivising their schemes and should be spending the time now to properly position themselves for the end of lockdown and to take advantage of the lack of supply locally over the next six months. So, if you are developing in Hertfordshire and want to discuss the best time to launch your new site, please contact us.
We would very happy to share our findings with you without obligation and help you make the most of these turbulent times, safe in the knowledge that you are dealing with the agent who has significantly listed and sold more new homes on Rightmove than any other agent in Hertfordshire for the last two years.