Property market predictions – what’s on the cards for 2020?

Following a somewhat sluggish year for the property market in 2019, there are signs that 2020 is off to a more positive start.

Many buyers and sellers put their plans on hold last year amid ongoing political and economic uncertainty but following December’s decisive election result there has already been a rise in the number of agreed sales.

According to the Royal Institution of Chartered Surveyors (RICS) latest Residential Market Survey, December marked the first month since May 2019 that the number of agreed sales showed a positive result. Nearly one in five (17%) of RICs members saw a rise rather than a fall in enquiries from new buyers in December, up from -5% in November. Sales expectations for the next three months are upbeat, with 31% of members anticipating that transactions will rise.

House prices are also ticking up, with Halifax’s House Price Index showing that December saw the biggest monthly rise in house prices in 2019 at 1.7%. Halifax expects house price growth of between 1% and 3% over the year, although Nationwide predicts that prices will remain broadly flat.

Outlook for mortgages

Anyone looking for a mortgage to buy a new home or to remortgage an existing property has no shortage of competitive deals to choose from, as lenders compete for business this New Year.

Falling inflation could mean that the Bank of England cuts interest rates in months to come in a bid to stimulate economic growth, but in the meantime borrowers would do well to review their options, especially as many mortgage deals are maturing this year.

According to industry data, £184bn of mortgages are set to mature in 2020, with 139,935 maturing in April alone, accounting for £20.9bn of loans. The only month with a higher value is December, when mortgages worth £25.6 billion are due to mature. Find out more about 2020 mortgage maturities and how you may be able to cut costs by remortgaging.

Landlords should prepare for April changes

The Buy to Let sector is set to see more tax changes come into effect from April, along with new minimum energy efficiency standards, so landlords may need to take steps to reduce their outgoings to cover any additional costs they might face.

With effect from 6th April, the amount of tax relief landlords can claim on mortgage interest payments will be cut to 20% for all tax-paying landlords, which means many higher and additional rate taxpayers will face steeper tax bills.

Landlords may also have to pay for property improvements if a property they let out doesn’t meet a minimum energy efficiency rating of E or higher, or risk a potentially hefty fine. Regulations were introduced in April 2018 for new lets and tenancy renewals, and they will include existing tenancies from 1st April this year. Improvements could include installing insulation so that heat isn’t lost through walls or the roof or adding new windows or door seals.

Remortgaging to a cheaper deal could help landlords recoup some of these costs. You can check out current best Buy to Let remortgage deals here.