2020 has been a challenging year for a number of prominent and unfortunate reasons. While we still getting to grips with the devastating effects of the pandemic on family, friends, and loved ones, one of the most imposing challenging impacts we now have to face is the uncertainty of what the future will hold.
While we naturally focus on the negatives at the moment, things are starting to return to normal across the UK as pubs, bars and restaurants have all re-opened along with the ever-present UK housing market.
Often seen as one of the cornerstones to the UK economy, the property market has witnessed, what many experts would call a remarkable recovery, as it rapidly kicks back into action in the middle of May. As you read this today, the property market is slowly coming into its fourth month of activity since its re-opening, property prices are rebounding, the number of transactions continues to spike. But what does this mean for those entering the market?
This year, the UK housing market has been defined by comings and going in terms of market performance. With very little to compare, it is hard to draw comparisons when trying to understand how the current market is performing. So, what do we know?
After two months of forced lockdown, the UK housing market finally re-opened in May and was greeted with open arms from all members of society. The first 12 weeks of the market re-opening was characterized by a distinct pent-up demand for both rental properties and properties for purchase.
The apparent demand for property has provided a positive light on the second half of 2020, after a relatively damning report from Nationwide highlighting the worries around UK property prices. The strong performance through the summer quickly put this to one side, as UK house prices rebounded and hit a record high in August after witnessing a 5.2% rise on the same time last year.
The recent strong performance not only highlighted how versatile the property market is in dealing with challenging circumstances, but it also provided distinct evidence of how important the property market is in supporting broader economic growth.
While there are most certainly positives to take from this summer, some of the leading experts and businesses have questioned how long this mini-property boom will last for as uncertainty creeps in as we enter the colder months and job retention scheme draws to a close.
The founder of the online estate agent Doorsteps.co.uk, Akshay Ruparelia, gave his thoughts on the property-boom we are currently witnessing.
‘The “mini-boom” that we are seeing currently is both bittersweet with the recent lockdown bringing the property industry to a halt. We are seeing a drop in house prices, leading to slightly more affordable housing for those looking to get on to the property ladder. Consequently, we have seen a rise in the number of individuals selling their houses, resulting in an upwards curve in the revenue flow within the property market. With the removal of stamp duty, Doorsteps have seen a 70% increase in instruction since 2019 pre-lockdown displaying an increased number of people selling their homes benefiting the wider property market.’
Is it the right time to buy?
While a seasonal slowdown typically defines the summer months, activity across the summer months has been unseasonably high due to the limiting nature of the hard lockdown we witnessed at the start of the year.
The question of whether it is the right time to buy is dependent on your personal circumstances. However, there are most certainly arguments in favour of buying at the moment. The most notable of these is the stamp duty holiday that lasts until the end of March in 2021.
Dramatically reducing the amount buyers have to spend when buying a property, the stamp duty holiday, announced by the Chancellor Rishi Sunak in July, provides buyers with the opportunity to save up to £15,000 on properties sold up to £500,000 in England and Northern Ireland. When you accompany such intervening measures as these alongside ever-changing property prices, buyers have the chance to pick up a property at a significantly reduced rate.
While there are elements that favour potential buyers, the current marketplace and distinct pent-up demand for property has created a situation which can price first-time buyers out of the market. As competition for a small range of properties continues to dominate the market, for those looking to enter the property market for the first time may want to hold off until the stamp duty holiday ends and competition naturally reduces.
There are most certainly elements in the current marketplace that benefit those looking to buy a property. Although the stamp duty and volatile property prices may allow buyers to find a bargain, the current demand for property may further bump up property prices in the coming weeks. It is safe to say experts, homeowners and potential buyers will be paying close attention to what will come in the coming months as we enter into Autumn and kids go back to school.