It’s safe to say that 2020 has been one of the most eventful years in post-war history. COVID-19 is having a profound impact on the global economy, though the rollout of vaccine means the pandemic could becoming under control in 2021.

It is obvious that the past 12 months have been challenging for consumers, investors and businesses. However, I also believe it is important not to overlook some of the positive developments that have also occurred.

Having worked closely with brokers and property investors over the course of the year, it is clear that property investment has played a vital role in supporting economic growth and productivity.


There is clear buyer demand, and I believe this will continue into the new year. To understand why this is the case, we must take note of the key developments that have defined property investment in 2020

An impressive bounce back

Ever since the first country-wide lockdown was implemented on 23 March, the UK’s property sector has been forced to adopt innovative solutions to keep the industry afloat.

Surveyors, conveyancers, estate agents, lenders, and brokers all suffered under the initial government lockdown guidance, which advised citizens to avoid moving homes due to the risks of COVID-19 contagion. However, relief was soon issued.

In early May, it was announced that the guidance had been altered to once again allow people to move home. Following this, the Chancellor Rishi Sunak announced the immediate introduction of a Stamp Duty Land Tax (SDLT) holiday on 8 June. This tax break, allowing buyers to shave up to £15,000 off any property transaction, triggered a surge in transactional activity and house price growth, ending a market stagnation present since the EU referendum in June 2016. Since January till November 2020; Halifax, Nationwide and Rightmove have all recorded UK house price growth of +7.6%, +6.5%, and +5.5% respectively.

The government, having recognised the cruciality of the property market in any post-COVID economic recovery, provided the necessary incentives for buyers to return to the market through the SDLT holiday. The real estate sector, in response, demonstrated an impressive willingness to adapt to the “new normal” necessitated by the pandemic. Of particular note, however, is how the specialist finance market successfully managed to support transactions that were at risk of collapsing during this challenging time.

The finesse of specialist financing

2020 witnessed an almost unprecedented level of uncertainty present in the financial markets. For high-street banks and mortgage lenders, there were fears of seeing a potential repeat of events that defined the global financial crisis over a decade earlier.

As such, there have been numerous reports that mortgages have been taking longer to deploy, and that there is an increased chance of mortgage application denial. Mainstream lenders, in a bid to minimise their risk exposure, have reduced the number of financial products on offer and adopted a particularly risk-averse mindset.

This mindset has meant that numerous potential buyers, whose loans had been agreed to in principle, suddenly faced increased risks of gazumping or their transactions collapsing due to elongated mortgage deployment times.

Research commissioned by Market Financial Solutions in September illustrated how this development has actually been disincentivising real estate investment. Over half (52%) of homeowners surveyed said they wanted to take advantage of the holiday but feared they would be denied a mortgage.

Specialist finance lenders, conversely, have an application review structure seemingly built precisely to support buyers during these uncertain times. Ever since the global financial crisis, specialist financing providers have ensured that their practices can quickly adapt to changing circumstances; and that every application undergoes an entirely objective review process.

This trend will likely accelerate as we enter into 2021. The ending of the SDLT holiday on 31 March, and the implementation of a 2% SDLT surcharge for overseas buyers on 1 April, means that buyers – both domestic and international – can access considerable tax discounts if they can complete transactions before these key dates.

Personally, I believe traditional lenders may struggle to handle this potential increase in buyer enquires. This could mean buyers lose out on the SDLT holiday due to not having access to the necessary finance in time.

Promoting bricks and mortar investment in 2021

Specialist lenders with access to in-house credit lines will be key to supporting the next wave of property investment in the UK. Unless the government extends the SDLT holiday beyond 31 March, then the beginning of 2021 will see a spike in demand for specialist finance products.

Having witnessed the adaptability and flexibility of specialist lenders throughout 2021, I’m confident that these firms will rise to the challenge and support buyers and their brokers until the end of the SDLT holiday and beyond.

Paresh Raja is the founder and CEO of Market Financial Solutions (MFS) – a London-based bridging loan provider. Prior to establishing MFS in 2006, Paresh worked as a senior professional consultant in one of the top five management consultancy firms, and also set up an independent investment group.

Subscribe to our weekly newsletter
Stay informed with our leading property sector news, delivered free to your inbox. 
Your information will be used to subscribe you to our newsletter and send you relevant email communications. View our Privacy Policy
Paresh Raja
Paresh Raja, Founder and CEO of Market Financial Solutions (MFS)

    Plan to Regenerate England’s Cities with New Homes

    Previous article

    Tenant Rent Arrears Decline but Industry Urged to Remain Cautious in 2021

    Next article

    You may also like


    Leave a reply

    Your email address will not be published. Required fields are marked *

    More in Featured