How has the Pandemic Affected House Prices?
The Coronavirus pandemic has had a huge impact on everyday life and continues to leave its mark on our finances, freedom and fun, but what impact has it had on the house prices and what is predicted to come next?
What’s Happening with Property Sales in the UK?
When COVID-19 hit, there was an almost immediate impact on the rate at which houses were being sold, causing concern for the economy and the housing industry. However, this reduction in sales was short-lived, with more than double the number of houses being sold in March 2021 than in March 2020.
Estate agents used online viewings to help keep people interested in the property market, and a lack of supply where people chose to stay put rather than sell has helped to move properties off the market quicker than ever, resulting in positive outcomes for sellers, mortgage providers and estate agents.
Stamp Duty Holiday Kept Houses Selling
One of the key components to keeping the housing market afloat during the pandemic was the introduction of the stamp duty holiday. Each of the UK nations offered their own version of this tax break with an initial deadline of March 31st 2021, in England, Scotland and Northern Ireland. However, this has now been extended until the end of June for England and Northern Ireland. Wales offered their tax break until the end of June 2021.
The Introduction of New Mortgage Deals
It remains true that the larger your deposit, the better deal you will get on your house purchase. However, it is clear that not everyone can afford a big deposit. So the government have responded with a 95% mortgage scheme that gives buyers who have a 5% deposit a guarantee that they will get a mortgage.
Announced in March 2021, the government have promised to guarantee the part of the mortgage that is over 80%, giving banks more security if the buyer later defaults on their purchase.
Predictions for the Rest of 2021
When you consider that the property market has enjoyed an ongoing boom during the pandemic, then working out where it will go as the world slowly recovers is fascinating. The general consensus is that the time from agreeing on a sale to completing will remain low, with the average at just 45 days currently, compared to 87 days in May 2020.
However, there is also a belief that once the tax breaks and support schemes cease, then the growth of house prices could stall once more, although Savills predicts that by the end of 2021, there will have been a further 4% increase in prices and that the lack of houses going onto the market will help to keep prices at a high. One thing seems certain; the housing market seems set to enjoy a steady and healthy period ahead.
When you are ready, we can provide you with a free, no obligation conveyancing quote from our panel of leading solicitors, simply click here to use our free tool.