The Impact of COVID-19 on the Property Market
“Stay at home.” It’s been the mantra of both lockdowns, and the activity that has defined much of the year, thanks to COVID-19. But what effect has the pandemic had on our house values, and how does it continue to affect the market?
The first lockdown in March 2020 was unsurprisingly accompanied by a slump in market activity. With hundreds of thousands of house moves stalled, estate agents unable to conduct physical property viewings, and household finances uncertain for many, analysts predicted that property sales would plummet. By the time the market re-opened in May, it was reported that house prices had fallen at their fastest rate since the banking crisis of 2009.
Breathing new life
To breathe life back into the market, the government introduced a stamp duty cut, announcing that the tax would only be payable on properties valued above £500,000. This has mainly benefited house buyers in more expensive areas, who saved the stamp duty they would have paid on properties above the previous threshold of £300,000.
A property boom followed, with house prices rising fast despite the backdrop of economic gloom. It’s difficult to say how this will change in the coming months, but many experts predict that we’ll see another dip, followed by a slow recovery in 2021. As it stands, the stamp duty holiday will end on 31 March 2021, but there are calls for this to be extended. As with anything COVID-related, the future is uncertain and very hard to predict.
Remote working and the demise of the city centre
Aside from stalling sales, COVID has also had an impact on the types of properties being sought. With commuters logging in from home, city-centre businesses have been hit hard, with a knock-on effect on the commercial property market. Homes in central locations, and on the London commuter belt, may also be affected if the work-from-home trend continues: why pay over the odds for location, when you can get your job done just as easily in a cheaper, more remote area?
Long months at home have prompted some to rethink their housing preferences, placing ample room to work and outdoor space high on the list of desirable features. Suburban neighbourhoods, with their attractive combination of space and convenience, are likely to thrive in the post-COVID property market.
Many of us with time on our hands in 2020 have turned to home improvements. Spending more time in the space has made us look anew at how we want to live in our homes, prompting redecorating and refurbishment projects galore. Kitchen and bathroom revamps have been popular, as have home extensions and loft conversions for home office space.
This focus on updating our homes may be a sign that homeowners have decided to stay where they are rather than risk a move at this uncertain time. One thing’s for sure: improving your home is certain to increase the desirability of your local neighbourhood. And that can only be a good thing, whether you decide to sell up or stay where you are.
Looking to revamp your home? Contact us today to find out more and to receive your no-obligation quote.