Worried about Luton house prices in 2022? Here's why you shouldn't be ...
Our way of life has taken a kicking over the last eighteen months. But as the Covid apocalypse unfolded and lockdowns were imposed, our homes became more important than ever. So what impact did all this have on Luton’s property market, and what does the future hold?
What Just Happened?
When everything shut down in March 2020, the property market in Luton and elsewhere held its breath. But one thing quickly became abundantly clear: lockdown or not, people still needed to move. The housing market became a symbol of resilience and hope, and in Luton we found that it never stopped.
Despite the challenges of Covid, the world still turned and the economy staggered on. Keeping the housing market alive was a key part of that, and the Chancellor recognized this by introducing the stamp duty holiday in July 2020. The impact was immediate.
Buyers and sellers alike were keen to capitalize on the tax holiday, and demand for property surged, pushing prices up. Luton’s property market has been riding that wave ever since, but is it set to crash?
We don’t think so. Here’s why.
What Happens When the Stamp Duty Holiday Ends
To understand what might happen after the holiday, you have to look at the extent to which it impacted people’s behaviour in the first place (Spoiler: not as much as you might think.)
The opportunity to get out of paying the government some tax is tempting, no doubt about it. But let’s face it, who would choose to move in the middle of a public health crisis if they could avoid it? The stamp duty holiday wasn’t the only reason people made the move this last year, which means it’s not the only thing that drove those price increases.
The reasons people move are complex, and while it’s clear from the numbers that some people did play virus-roulette, many others moved simply because they had to. A study by Nationwide showed that 70% of movers will still be making their move, or at least considering it, even beyond the stamp duty holiday - in some cases the cash incentive just nudged them into action a little earlier. With those moving intentions intact, prices are unlikely to take a tumble anytime soon.
But buyers are also smart. They will know that house prices were pushed up by demand, and some will be waiting for things to level off again before making the move, even if it means doing so after the holiday is over. This makes sense, as any saving from not having to pay stamp duty has in a lot of cases been wiped out by the price rises.
There will be more people who may choose to wait until they perceive the threat from Covid is lower, and yet others who might be forced to move for work once the economy opens up again more fully. The end of the stamp duty holiday is not the end of the impact of the pandemic.
Prices may stabilize, but we can’t see them crashing.
Penrose Has Got Your Back
Challenging times call for innovative solutions if you’re going to stay ahead in the property game. And at Penrose, pandemic or not, we’re always looking for fresh ways to enhance our clients’ experience.
Hot on the heels of the launch of our hugely successful property hub in Round Green and the expansion of the Penrose team, we’ve invested in some fantastic new internal software too. This impressive bit of technological wizardry will help us to help you even more effectively, by ensuring that everything we do is targeted to the specific individual needs of each client we work with.
We’re not just property experts - we know Luton inside out too. The needs of our town and the people who live here have always been our top priority, and with this new tech we’re better placed than ever to keep you informed about what’s going on in the world of property at a local level.
Slow Can Still Mean Steady
Our new software is already helping us keep a sharp eye on the numbers and honestly, we do think demand in 2022 will slow down. It makes sense, and to pretend otherwise is just silly. But a more steady market doesn’t necessarily mean lower prices, just that we’ve probably seen the end of those huge upward leaps for a while.
The National Association of Estate Agents’ Propertymark organisation reported that nationally, in April 2021, a record one-in-three properties sold for more than the asking price, and our own experience of the Luton market supports those figures.
While that’s amazing, it’s unsustainable. And at Penrose we know that the Luton property market works at its best for both sellers and buyers when demand and prices have time to settle following a period of upheaval. It’s time for the market to take a breath, and we’re actually quite relieved for Luton that it’s likely to happen in 2022.
Covid is going to be around for a while yet. Its icy fingers may well send us retreating back into some form of imposed hibernation again when winter approaches. But the wheels didn’t fall off the housing market in Luton last time, and we have no reason to think they will if things have to tighten up again.
The Magic of Luton’s Location
Luton has always been attractive for buyers migrating out of London to avoid the daft price hikes there (even pre-pandemic). Covid has accelerated that desire to leave even more.
Crowded trains and buses have become hotbeds of viral transmission, and despite vaccine success and ongoing social distancing measures, many commuters remain reluctant to return to these ripe environments.
One of Covid’s lasting legacies is the change in how we work. In a recent survey, the Chartered Institute for Personnel and Development found that despite restrictions being lifted, around two-thirds of workers plan to continue hybrid working.
This kind of working means more time spent at home and more people wanting extra rooms or garden space to use as an office, which in turn means more people house-hunting. But with many businesses on the fence about homeworking 100% of the time, a good number of workers are also looking to remain within striking distance of the capital.
Luton is a prime location. Its relative affordability and fantastic transport links mean that property in our town will never be short of interest, especially now. And that will help to keep prices stable.
In Summary …
The true long term impact of Covid on the property market remains unknown, but here’s the thing: the landscape of our lives may have changed, but no matter what happens, people always need to move. That’s true now, and will remain so into next year and beyond.
Luton’s property market has weathered the Covid storm brilliantly, and its proximity to London leaves us confident that it will continue to thrive. The waters in 2022 might be a little calmer, but will offer some much needed stability and help Luton to remain in a strong position for years to come.
If you’re looking to buy, sell or rent in Luton, then please do get in touch. With our experience of the local market, boosted by our shiny new software, we’re confident that we’ll be able to guide you in the best possible way. Let us show you how we can help.