UK property predictions: how the housing market will change in 2021

2020 was perhaps the most unpredictable year in property, thanks to the pandemic. However, the housing market has stayed remarkably resilient, with UK house prices experiencing their biggest monthly rise in 16 years. Now, with Brexit negotiations ongoing, the Stamp Duty Holiday set to end in March, and the trajectory of the pandemic still uncertain, there is likely to be continued change in the property sector. To try and make sense of it all in the coming year, we’ve laid out our predictions for the housing market in 2021.

House prices will stay resilient

One of the biggest questions over the property market for the coming year is: “how will housing prices change?”. Demand in the market is currently at an all-time high and during the summer peak, properties were selling for the asking price, or even more. We briefly saw house prices soften prior to the second lockdown, but with positive news of a vaccine on the horizon, there is another strong boost to the housing market.

Therefore, our prediction is that house prices will stay resilient and stable in 2021, particularly for three- and four-bedroom houses. There will be regional variations and we are likely to see prices in some areas rising, while some of our big cities and town centres may see a fall of around three-four percent.

The stamp duty holiday will likely be extended

The house sales pipeline has grown significantly since the introduction of the Stamp Duty Holiday this year. We’ve already seen calls to extend the deadline from the property sector, and that announcement would encourage continued and much-needed momentum in property sales next year, as well as provide a welcome boost to the wider economy.

Of course, it’s unlikely to be extended indefinitely, so we hope the Chancellor will announce in March that the holiday will be extended until the end of 2021.

Upsizing to the suburbs will continue to grow in demand

Having to spend more time at home this year has led to many of us seeking more space, looking for gardens and separate areas to enable easier working from home or to home-school children. With the commute to big cities still not having returned, we are likely to see a continued ‘escape to the suburbs’ in 2021 in order to upsize to these larger properties.

Conversely, we are already seeing reduced demand for flats in city centre, while we expect the desire for properties, in suburbs to continue to grow. House buyers will increasingly seek homes in areas around one hour away from big cities, with good transport links, facilities and lots of green space. Outside London this is areas such as Egham, Uxbridge and Woking, while further north we are seeing growing interest in Warrington, Crewe and Loughborough.

The Brexit transition won’t affect the property market

The conclusion of the ongoing Brexit negotiations might have an impact on the job market, which could then have a ripple-out effect to housing. Conversely, confirmation of a trade agreement with Europe, coupled with the positive news about a vaccine, would drive demand in the housing market and lead to a boost in the economy as a whole. But overall, the desire for lifestyle changes will influence demand in the housing market more than Brexit.

Technology will transform the way we move home

Virtual viewings saw a huge uplift during the pandemic, and we predict these will still stay a strong part of the sales process in 2021. The ease and convenience of video tours will continue to help those unable to see a house physically, and reduce the time needed for wasteful viewings – for both buyers and sellers, as well as landlords and tenants.

There’ll be an uptick in buy-to-let investments in residential property

With so many companies now working from home, many commercial property tenants are downsizing their office space. This uncertainty in the commercial sector will lead many landlords and investors to diversify their portfolio and invest in more residential property developments in order to minimise risk.

Online estate agencies will dip in popularity

In a constantly-changing market, vendors will want local expertise from their estate agencies to help them through. So, we predict a shift away from online-only agencies towards those with a high street presence. Online agencies currently account for only around 8% of all transactions, but this might slip again if the market gets more challenging in 2021 than the boom in demand that we have seen this year.

The pandemic has changed how we all think about our homes and where we live, possibly forever. Estate agents must now prepare to support their customers to make that change in 2021.


By Kevin Shaw, National MD Sales, LRG

Kevin has 35 years’ experience in the property industry and joined LRG 5 years ago. He started his career in estate agency in the late 1980s with Andrew’s in the West Country. Prior to Leaders Romans Group, Kevin was with Spicerhaart for 16 years as Regional Managing Director, Group MD and Divisional Director, gaining a wealth of experience in managing large teams and expanding into new areas. Kevin is now the Managing Director Residential Sales for the group, heading up the Sales and Financial Services Division. He has a track record of delivering results through building and motivating high performance teams and a strong belief in customer service.




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