December 14th, 2020.
9 Months On: What Are the Long-Term Effects of Covid on the Property Industry?
It’s now more than 9 months since we first went into lockdown here in the UK and a lot has changed throughout 2020. So, with 2021 just around the corner, we’ve decided to take a retrospective look back over the year to assess the long-term effects of Covid on UK housing prices, and reveal whether now is a good time to buy a house.
How Have Property Prices Changed?
According to HM Land Registry’s data, the average price for a UK property in March 2020 was £233,168, whereas the latest numbers released show that in September this value had increased to £244,513. This has gradually grown throughout the year, despite disruption caused by the pandemic.
The same statistics reveal that September saw the largest yearly percentage change (4.7%) in some time…
…and the second largest monthly percentage change (1.7%) behind June 2020 (1.8%).
What is Our Housing Market Forecast for 2021?
Until March 31st 2021, there is a stamp duty holiday which could save house buyers a lot of money. Another positive is that rental prices are resilient, meaning they’ll likely increase with time. However, experts predict that property values will plateau or even drop in the year ahead, meaning purchasing may only be a good idea if you’re in it for the long-term.
Furthermore, since the start of the pandemic, lenders have favoured buyers with large deposits as they’re less likely to fall into negative equity or default on payments. Although using a financial broker, like us, can find you a competitive finance deal, we expect to see this stricter lending criteria continue for the next few months.
One area of the industry which may see some complications moving forward is the student HMO market. With many university students now distance learning, there is less demand for student housing (many are choosing to stay in the family home). This is something that could lead to an increase in vacancy rates, and make student letting a less attractive prospect.
Is Now a Good Time to Buy a House?
With house prices predicted to plateau, those considering purchasing a property as an investment might be rewarded by waiting for the market to stabilise.
When it comes to buying a new family home, moving house is a personal decision. However, in general we would advise against moving during the festive period, if it can be helped.
Christmas is a time for coming together with family and moving can disrupt this. After all, hauling boxes and painting walls doesn’t exactly scream festive cheer!
You may also find that solicitors, removals firms, and other supporting professionals shut up shop over the Christmas period anyway. Or, if they’re still open, they could charge a higher premium for their services.
So, if you can wait to pick up your keys until January, that may be best.
Looking for Finance?
If you need help securing the funds to purchase your next property or development finance to fund a build project, get in touch with our friendly and award-winning brokers today.