The Lasting Impact of Covid-19 on the Property Market.
The Covid-19 pandemic has brought unprecedented change to the lives of everyone across the globe. From spending the best part of 18 months indoors, to restricted socialising and a general limited way of living, the pandemic has impacted us in extreme and various ways. In amongst the disastrous outcome of the pandemic (countless deaths, border closure, economic turmoil and political upheaval), there has been crisis on a smaller yet unimaginable scale. The significant loss throughout financial markets occurred due to lows in consumer sentiment, and due to the stay-at-home restrictions, business closures and financial hardship, the property market began to suffer.
However, over the last few months there has been significant progress. The hopes of ‘normalizing’ society in the wake of the pandemic has created a sense of enthusiasm in the housing market and has undertaken strategies such as low mortgage rates as an incentive to fuel interest in homebuying. The evident changes the pandemic has brought to the housing market has left many questions unanswered, so We Buy Any House have compiled the most asked questions and provided an insight to the lasting impact of Covid-19 on the property market.
Q- Why Did the Pandemic Affect the Property Market?
A- The introduction of lockdown in March 2020 significantly impacted the behaviour of people. Those who planned to move or sell their house either opted to put their plans on hold or rushed to sell their property quickly with the aim of making financial assets more accessible during a period economic uncertainty.
By the end of March 2020, data collected by Rightmove showed that rental interests fell by 42%, and by April 2020, sales offers dropped by 70%. Landlords who were looking to sell their properties were also faced with restrictions, as the UK government placed bans on tenanted properties appearing on the market during lockdown.
Q- What Happened to the Property Market Immediately After Restrictions Were Lifted?
A- Following the easing of restrictions, the property market was flooded with its first wave. Tenants and new buyers rushed to continue their journey on the property ladder after a long pause. During the summer months, Rightmove suggested that properties that were “sold, subject to contract” rose by 125% compared to the previous year.
Statistics from September 2020 showed that more people were applying for a bank loan in order to find a property with more space- including more bedrooms, larger lounge areas and outdoor space. This was probably due to the fact people has spent an unprecedented amount of time in smaller homes or apartments.
Q- What Does the Property Market Look Like Now?
A- As of July 2021, figures show that house prices have risen by almost 6%, with the average price of a house being £227,836. Property value is increasing monthly by 0.8%, and in October of 2020 house price inflation grew to 7.5%.
Q- Will Covid-19 Affect the Future of the Property Market?
A- Due to the pandemic, those looking to buy properties are becoming invested in houses with more space, in addition to moving away from large cities to live in the suburbs. Forecasts reveal that properties in London are expected to grow by 21% by 2025. However, it is important to stress that this only a prediction, and there is a plethora of external factors that may affect the property market.
The lack of property supply is bound to keep property prices high, and this imbalance could keep prices high for the rest of the year if not longer, and with even smaller tax savings on offer.
Q- How Do I View a House During Now?
A- Throughout lockdown, estate agents began offering video house viewings, and the virtual property viewing is still ongoing despite lifted restrictions. In-person viewings may follow some restrictions, such as wearing a mask and sanitising your hands.