2020 will certainly go down in history as a unique year. That much we can say for sure! Since we are not yet at December 31st, I will avoid tempting fate by suggesting we have seen everything that is going to play out as yet. However, the one certainty is that all the certainties thus far in 2020 have simply not panned out.

I should add that my only qualifications to write this article are as a property investor myself, with a hand in over 350 units purchased in the last decade, a former wealth manager and qualified letting agent, alongside two masters’ degrees that contain a healthy dose of economics, which arguably have not been much at all this year! I have no formal medical training, simply an obsession with numbers which bled into significant research around Covid during the (first!?) lockdown, and an analytical brain.

From a helicopter view it certainly is difficult to make sense of the current turn of events. At the macro level the headlines have been extremely confusing to say the least. Property continues to turn out a plethora of indices, indicators, and data - and a lot of the large news outlets do their best to misinterpret it depending on their larger agenda, rather than offer up anything in terms of useful analysis. Headlines this year have included: “Prices up 7.3% annually in September 2020 - the strongest gain for 4 years” (Halifax house price index) - whilst this is true, it does nothing to point out the significant political uncertainty that was weighing over the market in September 2019, if any of us can even remember that far back (looking down the barrel of a potentially difficult election, which could have had significant downside impact upon house prices). Nationwide represents the same period (YoY to September 2020) as a 5% increase, again the largest since 2016.

I prefer to take the geographical biases and also the customer base biases out of the datasets (e.g. Nationwide do a lot of lending at higher LTVs, Halifax HPI contains a bias towards some northern areas) and look at the ONS - whilst the September figures will not be released until the end of November, August showed a 2.5% year-on-year increase at the ONS (versus Halifax showing 5.2% and Nationwide showing 2.0%. The danger of reading into anything on any month, during such a period of volatility, is unwise but the ONS figures show an improvement on 2019 (which was a very flat year, with Brexit jitters alongside the 2019 election).

So how can prices have raced forwards in such a difficult year? Well, we should not forget the first two-and-a-half months. The Boris bounce was strong and March 2020 showed a strong year-on-year increase in comparison to the 2019 figures. Then the lockdown - and a total “experiment” from the market’s perspective. Pent-up demand and a lack of supply then forced prices up in the most basic economic analysis of demand and supply curves. The “rain that never came” (or the recession that had already passed before it was recognised) - as it may be known as (pending other economic events of course!) saw lots of job losses, but also significant job creation, and so far has concentrated the job losses at the lower socio-economic and skill levels, sadly for those affected.