How has COVID-19 Affected the UK Housing Market?
Just about every sector of the economy was touched by the effects of the pandemic in some way or another. Online retailers enjoyed surging sales as bored brits looked for new toys with which to distract themselves. High streets, on the other hand, remained deserted.
The housing market felt the impact of the lockdown measures in profound and distinctive ways, and it’s difficult to say with certainty what the long-term effects will be.
During the lockdown
The housing market was effectively put into suspended animation. After all, if you’re not allowed to leave your house, it follows that you won’t be able to inspect any other houses which you might like to buy. Growth in house prices slumped to 1.8% in May, according to Blend Network. This was down from 3.7% in April. Though the growth was actually negative for the month, the yearly trend was upward.
After the lockdown
Following the relaxation of the lockdown, estate agents and solicitors across the country have found themselves inundated with pent-up demand. This has created upward pressure on prices, as would-be buyers look to force their sales through with a hefty injection of cash. However, there will come a point where this pent-up demand is exhausted, following which, many experts predict, house prices could once again fall to their previous levels.
Measures taken by the government to stimulate demand
The government is keen to keep demand high, as a collapse in the housing market could have dire ramifications for the economy more broadly. Among the measures introduced is a cut to stamp duty, saving would-be buyers up to £15,000 if they decide to move before the end of the financial year. This has forced many would-be buyers to bring forward their plans, for fear of missing out on the giveaway.
What about Holiday Homes?
All of these market forces are acting upon the holiday homes business, too – which has enjoyed a similar surge in sales since the relaxation of the lockdown. While the definitive measures will take a while to come out, the anecdotal evidence suggests an almost overwhelming spike in activity. According to Park Holidays, a holiday-homes provider, the demand has been unprecedented: “We are staggered by the level of interest in people keen to buy their very own holiday home,” said a representative. “Sales during the last 3 weeks have been almost double that of the previous year and the demand is still strong. “