In March 2020 the Prime Minister announced the first of three national lockdowns, which affected every person and business in the country. Every sector has had to make adjustments to adapt to the ever-changing circumstances of the last year, yet some sectors – such as the UK property market – have remained strong.
Property experts such as Zuneth Sattar saw the property market in the UK shut down almost entirely during the first lockdown – remaining open in only the most exceptional circumstances – with construction and building sites also required to close.
The following two lockdowns did not require the property market or construction projects to stop functioning, and the property market bounced back due to growing demand from people moving house to accommodate their new circumstances.
The Change in Demands
National lockdowns, local restrictions and working from home have forced many to rethink their accommodation. Beyond the lockdown and work-from-home orders from the government, many employees will continue to work from home, as companies and individuals have realised the benefits that it can offer.
In addition to working from home, many people spent more leisure time at home, leading them to reassess what they want and need. Outside space became a more important priority, with some people moving to more rural locations, whilst others relocated to the city to be near green space and parks. For further information about recent property trends, please refer to the embedded PDF.
Property Prices After the Pandemic
As preferences and priorities shifted throughout the pandemic, house prices increased to reflect the growing desire to move and upgrade. Rising by 13% year-on-year, house prices have boomed over the past year, yet there are signs that the UK property market may be slowing down.
The number of houses that were being sold grew significantly thanks to the stamp duty holiday introduced by the government to bolster the property market. Initially, buyers could save up to £15,000, and between the end of June 2021 and the end of September 2021 buyers could still save £2,500 as the scheme tapered off.
The stamp duty holiday set prices soaring, but as it came to an end in September 2021, so too did the high-volume of transactions that it caused. When demand for property falls house prices tend to fall too, so the end of the stamp duty holiday may also be the end of the 2020 property boom. Provisional data from HMRC shows that in July 2021 there were 73,470 house sales, which was a 4% increase year-on-year – but also, more importantly, a 63% drop compared to June 2021.
The data from January 2020 onwards shows a significant slump in transactions that started in March 2020, gradually rising again to reach pre-pandemic levels by September 2020. From September 2020 onwards, the number of transactions grew steadily until there was a sharp rise that started in January 2021 and peaked in March 2021. There was a significant drop off in transactions in April and May 2021 – after the highest tax break ended on the 30th March – yet there was another steep rise in June 2021, with the amount of transactions exceeding the earlier peak just a few months before in March.