Britain’s Housing Market Wakes up After Lockdown
The housing market in the UK is experiencing a small post-lockdown flourishing. The new rise in prices and sales will certainly help the economy recover. However, the question remains how significant will this recovery be and how long will the rise last.
The backdrop of this sudden increase in property sales amid the COVID-19 crises and economic recession is set by a recent law introduced by the chancellor of the UK. On July the 8th Rishi Sunak announced a stamp duty “holiday” that will last until 31st March 2021.
This tax cut aims to stimulate sales of real estate in England and North Ireland after the pandemic. The stamp duty holiday is intended for all people that buy a property that is up to £500, 000. For instance, if you buy a house that is within the average range of £248,000 you can expect to save £2,460 in taxes. For property that is around the 500,000 mark, the tax savings are £15,000.
Because of this £3,8 billion stamp duty cut, people all over the country are considering investing in new properties. Furthermore, after the cut was announced websites that deal in real estate saw an increase in visits and interest in purchasing properties.
After Sunak’s announcement, there was an increase in sales between 8 and 12 July. When we compare the sales of real estate for the same period last year the increase is up to 35%. This is even larger than the observed 15% increase that we saw in June this year. Therefore, the strategy to bolster real-estate sales is paying off, as we can see from the immediate effect it had on people’s spending habits.
There are speculations that this boom will be short-lived. But there is also an opinion that this increase will continue for an extended period. Mostly because countries will start opening their borders and sales of properties will increase. Therefore, we can expect more trade in the real-estate sector that will certainly help the economy recover.
On the other hand, a new trend is emerging. We can see that people are more interested in properties that are in rural surroundings. Big cities are losing their allure as people question the lifestyle choices they make. This sudden interest in properties in small towns and villages is inspired by the lockdown.
Maybe this trend will fall after the crisis subsides. But there is also a good chance that people will move out of urban centres in the future. Not just because they want to have a garden if new lock-down measures are introduced. There is a genuine need emerging in people and it is taking them back to the countryside. Either because they are concerned with their health or because they want a different lifestyle than the one that is present in highly urban centres.
This change in interests will restructure the hight of prices. That is, we may see a drop in property prices in cities like London and an increase in county side property. However, it is still early to claim anything because the global pandemic has not subsided. People may change their opinion once more before the crisis ends.
The fact is there is a tax cut in the UK that is helping increase real estate sales. This is a good opportunity for all interested people to buy new houses or flats and save a good number of pounds in the process. This money can then be used for refurbishment or maybe even for a short holiday once the pandemic subsides. If you were thinking about purchasing a new property now is the ideal climate to do precisely that.
