Covid-19 changed the world as we know! With companies shutting down, businesses facing major losses, industries suffering as a whole and lockdown in almost all the countries around the world, Covid-19 made the world stop, metaphorically. With the UK going into its first lockdown in March, uncertainty filled the country. No one knew what to expect, what the future holds and how the lockdown would affect each person individually.
The first lockdown in the UK brought everything to a standstill. The UK government banned property viewings, estate agents were forced to shut down their companies temporarily, even moving companies as well as surveyors and appraisers were forced to halt their operations. Keeping that in mind, most believed that the second lockdown would follow suit. estate agents in Gloucestershire were ready to shut shop for the second lockdown and moving companies were ready to close their doors again, but lucky for most, the UK government did not completely ban property viewings and real estate transactions! So, while people were still looking for properties for sale in Gloucestershire and Manchester, no one was too sure of what the future holds for the real estate industry. But, here is what the experts have to say about how the second lockdown might impact the housing market in the UK.
Introduction of the stamp duty holiday helped boost sales
The stamp duty holiday was an incentive started by the UK government to increase the buyer’s confidence. Basically, this was a temporary suspension of stamp duty on real estate worth £500,000 or less, and a reduction in the percentage of stamp duty on properties over £500,000. Since potential buyers could save a staggering £15,000 on their purchase thanks to the stamp duty holiday, there was a drastic increase in property viewings. Essentially, the real estate industry witnessed a mini-boom after the first lockdown because of the restrictions on real estate transactions. Hence, even though there are so strict restrictions in the second lockdown, we can expect the real estate market to see a slight rise in the volume of transactions or at least remain stable. As of now, no experts are predicting that the housing market will fall after the second lockdown. So, if you’re thinking about getting in touch with letting agents in Gloucestershire or Leeds or even London City, now would be a good time to do just that.
No restrictions on real estate transactions led to a rise in mortgage approvals
In the second lockdown, people were able to go for property viewings and estate agents were allowed to keep running their businesses. So, during the second lockdown, buyers who were ready to close deals and sellers who were desperately looking to sell their homes decided to make the most of the moment. This led to a post-lockdown boom in the property market! Mortgage approvals reached a 13 year high in September 2020 because the number of potential buyers who were willing to invest in real estate increased drastically. This was probably because of the low-interest rates coupled with the stamp duty holiday which improved buyer confidence and allowed potential buyers to save tons of money on their purchase!
Post-lockdown effects include converting the UK into a buyer’s market
Considering that the UK has now become a buyer’s market, it is safe to say that potential buyers and real estate investors will be able to buy properties at discounted prices, much lesser than the asking rate due to the lack of demand. However, it is worth mentioning that, usually the beginning of the year is slow and stable in the real estate market, but the after-effects of the lockdown led us to believe that there will be a great increase in demand for real estate in the coming months, especially till the stamp duty holiday continues. Once stamp duty holiday is over, which is currently expected as on 31 March 2021, real estate experts predict that we might see a slump in the property market. Of course, some experts believe that the housing market in the UK might rise by 2 to 5 per cent in 2021, so no one can be too sure of what the future holds.
At the end of the day, as long as real estate agents continue to play their part in driving up the real estate market and boosting sales, there should be no problem. Also, it is essential for estate agents, buyers and sellers to follow all the required protocols and social distancing norms to ensure that the housing market can continue to grow and flourish.