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What to Expect in the Property Market for 2020

detached houses on a residential street in the UK

It’s no secret that the property market in 2019 was less vibrant and active than in previous years. As we start the new decade, there are already signs of more positivity. The presence of political and economic uncertainty in 2019 caused many buyers and sellers to put their plans on the backburner, but with a decisive general election result, we have already observed an increase in agreed sales.

Residential Market Survey data from the Royal Institution of Chartered Surveyors (RICS) indicated that December 2019 was the first month since May 2019 in which there was a rise, rather than a fall, in enquiries from new buyers. There is an equally upbeat feeling about sales over the coming quarter, with 31% of members expecting a rise in transactions.

There are even signs of house prices on the uptick, with the Halifax House Price Index showing that December saw the greatest monthly house price increase in the whole of 2019. Halifax predicts a growth rate of 1-3% for house prices over the year, though predictions from Nationwide are less optimistic.

The outlook for mortgages

Whether you have plans to find a mortgage to purchase a new home, or are looking to remortgage your current property, there are plenty of deals to explore. The first quarter is a good time to enter the hunt, as lenders compete to secure business for the new year.

With inflation falling, we could see the Bank of England cut interest rates in the coming months in an attempt to stimulate economic growth. This is definitely something to watch, and borrowers are advised to explore their options thoroughly as mortgage deals begin to mature over the year.

Industry data suggests that a total of £184 billion of mortgages will mature in 2020, with almost 140,000 maturing in April. This will account for £20.9 billion of mortgages – the only month that tops this is December, where mortgages to the sum of £25.6 billion are due to mature.

April changes that landlords need to prepare for

There will be new changes in the tax laws for the But to Let sector arriving in April 2020. There will also be new minimum standards for energy efficiency, so landlords will need to take the necessary steps to reduce their outgoings in order to address the additional costs that may arise.

From 6th April 2020, landlords will see a 20% cut to the amount of tax relief they can claim on mortgage interest payments. This means if you are already a higher or additional rate taxpayer, your tax bills will become steeper.

Landlords may also find themselves having to pay for work on their property if it doesn’t meet the new minimum energy efficiency standards. The new regulations will require your property to have an efficiency rating of E or higher, with hefty fines coming in for landlords who fail to comply. These regulations were introduced in April 2018 for all new lets and tenancy renewals, but will apply to existing tenancies from 1st April 2020. The improvements you may need to implement will include things like:

  • Installing insulation
  • Installing double glazing
  • Adding door seals

Landlords may be able to recoup some of the new costs by remortgaging to a cheaper deal. Think Plutus can help with expert advice and insights on the Buy to Let market.

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We do not charge a fee for our advice, instead we charge for arranging your mortgage. Our typical fee is £495 depending on your personal needs and circumstances. For insurance business we arrange policies from a panel representative of the whole of the market. Think Plutus® is a trading name of The Finance Planning Group Limited. The Finance Planning Group Limited is authorised and regulated by the Financial Conduct Authority (FCA). Registered in England No. 3894404. Registered office: Hurstwood Grange, Hurstwood Lane, Haywards Heath, West Sussex RH17 7QX. The FCA does not regulate most buy to let mortgages.