Over the past few months, we have seen a sharp drop in the housing market (of both sales and lettings) due to Covid-19. Fortunately, this has picked up again since we came out of lockdown in May and is on a steady increase, slowly returning to a market similar to the one before lockdown.
There have been many factors which have helped in the increase in demand, including the Stamp Duty Holiday, which has reduced rates of Stamp Duty Land Tax (SDLT) for all residential properties purchased from 8th July 2020 until 31st March 2021, saving you up to £15,000! Although the higher rate on additional dwellings does still apply if you are purchasing a second or subsequent property.
Overall, demand for properties is rising, whilst supply is diminishing. But what does this mean for house prices? Yep, you guessed it! An increase!! In fact, Nottingham is in the top 5 of all areas in the UK with the biggest property price increase!
Compared to 2019, supply is down 18.4% whilst demand is up 25.3% and house prices have risen from 2.4% in June to 2.7% in July.
But will it continue this way?
With the inevitable rise is unemployment that will sadly come in waves over the next few months, it is likely that house prices will steady as more people will be unable to afford to move and the demand for properties will diminish.
So, what about lettings?
We know that demand for rental properties across the UK has increased by 20% compared to March 2020, whilst supply of rentals has only increased by 7%.
Mortgage lending has become more difficult with less, and more expensive, options out there, especially for those of us with smaller deposits. This puts a higher demand on the rental sector, as people are now renting for longer.
How has Covid-19 changed the market?
Interestingly (and probably expectedly) people are now searching for gardens and balconies when looking for a property, with home searchers particularly wanting a garden up by 97% and home searchers looking for a balcony up by 166%!
So, what is the verdict?
I am afraid it is just a watch and wait game at the moment. The market is enjoying a post-lockdown “mini boom” now, but how long will it last?
