The Impact of the Coronavirus Pandemic on the UK Property Market
The COVID-19 pandemic has had a significant impact on many aspects of our lives, and the UK property market is no exception. With the country facing lockdowns, social distancing measures, and economic uncertainty, the property market has had to adapt to a rapidly changing environment. In this article, we’ll take a closer look at the impact of the coronavirus pandemic on the UK property market.
Initial impact of COVID-19 on the property market
At the start of the pandemic, the property market ground to a halt as the country went into lockdown. Estate agents were forced to close their doors, and property viewings were not permitted. This led to a sharp decline in property sales, with many buyers and sellers putting their plans on hold.
In April 2020, the number of property sales in the UK fell by 53% compared to the same period in 2019. This was the lowest number of transactions recorded since records began in 2005. The average house price in the UK also fell by 0.2% in April 2020, the first fall in house prices since December 2019.
Support offered by the government
To help support the property market during this uncertain time, the UK government introduced a number of measures. In July 2020, the government temporarily cut stamp duty on property purchases up to £500,000. This helped to stimulate the property market, with many buyers taking advantage of the tax break.
The government also introduced the Coronavirus Job Retention Scheme, which helped to prevent widespread unemployment and supported people’s ability to pay their mortgages. This helped to prevent a significant increase in mortgage defaults and repossessions.
How the COVID-19 pandemic caused a shift in demand
The pandemic has led to a change in what people are looking for in a property. With many people working from home, the demand for larger properties with outdoor space has increased. There has also been a shift towards properties in rural areas, away from the hustle and bustle of city life.
This change in demand has led to an increase in property prices in rural areas. In September 2020, the average price of a property in the countryside was £327,971, an increase of 5.2% compared to the previous year. In contrast, the average price of a property in a city was £259,574, a decrease of 0.2% compared to the previous year.
Real estate agents and listers offering virtual property viewing
To adapt to the pandemic, many estate agents turned to virtual viewings to show properties to potential buyers. This allowed buyers to view properties from the comfort of their own homes, without the need for physical viewings.
Virtual viewings have become increasingly popular, and many estate agents now offer them as a standard service. This has helped to reduce the number of physical viewings required, which has helped to reduce the risk of spreading the virus.
How the COVID-19 pandemic impacted the future of property market in the UK
Despite the initial impact of the pandemic on the property market, it has proved to be surprisingly resilient. The introduction of government support, such as the stamp duty holiday, has helped to stimulate demand and keep the market moving.
As the country emerges from the pandemic and the economy recovers, it is expected that the property market will continue to grow. The demand for larger properties with outdoor space is likely to remain, as many people continue to work from home.
The government has also announced plans to introduce a mortgage guarantee scheme, which will help to support first-time buyers and those with smaller deposits. This is expected to further stimulate the property market and increase demand.
Final words
The coronavirus pandemic has had a significant impact on the UK property market. The initial lockdown led to a sharp decline in property sales, but the introduction of government support and the adaptation of estate agents to virtual viewings helped to keep the market moving.The pandemic has also led to a change in what people are looking for in a property, with a shift towards larger properties. No matter what, we can see how people have learnt their lessons during the pandemic and working towards creating a favorable property market. We can expect things to be normalized in a couple of years.
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