Not the general future, although I predict your weekend will include a couple of walks, at least two hours of Netflix and, if you’re feeling particularly decadent, a trip to the supermarket. But I digress.

The future I’m gazing into is focused on the housing market, particularly the buy-to-let market, and what we, and more importantly our landlord clients, can expect over the coming year.

Mortgage rates

Let’s call it now: the Bank of England base rate isn’t going up anytime soon. Some will try to argue against this, but the fact is our economy really needs people to get spending, not to squirrel away savings earning lots of interest (remember those days?) for a rainy day.

While a base rate increase is not imminent, lender margins are a different matter. Momentarily, cast your mind back to before the stamp duty holiday announcement (the first one). Lender pricing looked very lovely; so lovely, in fact, that a couple of lenders bowed out of the market because, with margins as they were, it wasn’t worth lending. After the holiday announcement, applications flooded in and lenders started pushing pricing up. Some may say this was to manage business volumes. Those of us who are slightly more cynical would say they did this because, well, they could.

No surprise then that, when things in the housing market cooled off in January this year, lenders started to reprice downwards again.

Reporting on these margins every week, I know that rates are still easing across both vanilla and specialist lenders. Will this continue all year? No. As we saw before, at some point the numbers stop making sense and, ultimately, lenders want to make money. While there’s still room for a little more easing, I don’t think we’re far off the lowest point for the year, where it’s likely to settle for a good while.

House prices

Although concerns remain about house prices since the stamp duty holiday and the fallout from the eventual end of the furlough scheme, etcetera, the immediate danger has been kicked down the road to the latter half of the year.

The prices of new-to-market properties eased in February but there was no post-apocalyptic tanking that some had predicted. Furthermore, Rightmove reported an 8 per cent increase in new prospective buyers compared to February 2020. Needing some kind of miracle to meet the original stamp duty deadline by then, tax savings can’t have been their motivation.

All of this demonstrates that our property market is more robust than some gave it credit for. Both Knight Frank and Savills have consulted their own expert tea leaves and re-forecast UK house prices for 2021, moving from no growth to 5 per cent average. Even central London, which is noticeably missing the international buyer market, is expected to grow by 2 per cent.

Rental yields

Against all odds, rental yields went up in 2020, and we expect that to continue throughout 2021. There will be regional variations in the level of growth, but the expectation is that rents will increase by 5 per cent each year for the next five years. Areas with particularly strong rental yields for this year are the Northwest, Yorkshire and The Humber, and Scotland, all sitting above a 4.5 per cent average yield.

So, after consulting my housing market tea leaves, what does this all mean?

The market is going to be favourable to landlords in 2021. House prices will hold firm and rise, mortgage rates will be competitive and yields will be strong. As a property investor, could you ask for much more?

Jeni Browne is business development director at Mortgages for Business