For a long time, it has been virtually impossible to accurately foretell how the UK’s property market will fare in the latter stages and aftermath of the COVID-19 pandemic.
However, certain clues, trends and behaviours are now emerging as the country and its economy gradually re-open, allowing experts to make tentative estimates regarding the market’s future.
In this article, we explore a few of these predictions and the reasons behind them.
The Surge in House Prices Will Continue
The pandemic – and particularly matters such as furlough and home working related challenges – have led to a huge demand increase in the field of property sales. This, coupled with the relatively low level of supply, has forced house prices to steadily rise.
While some predict that the mass job losses and other financial implications of the pandemic and Brexit combined – coupled with the return of stamp duty – will bring this growth to a grinding halt and cause a subsequent dip, there seems to be little likelihood of this happening any time soon.
In fact, the Nationwide Building Society has recently predicted that the current surge will probably continue for the foreseeable future.
Sales May Take Longer
In the late Spring of 2021, the average sale was agreed in just 45 days. However, this blistering pace is likely to slow as people return to work and stamp duty comes back into effect.
For now, though, demand remains high. Therefore, it is unlikely that the market will slow to any significant extent – but homeowners requiring a quicker turnover may opt for a fast homebuying service to ensure they get at least 75% of their property’s market value in as little as 7 days. Whilst the sales lead times are longer, no sale no fee house auctions are another option.
There are Further Challenges Ahead for First Time Buyers
It’s fairly clear that the pandemic-influenced rise in house prices will constitute a significant challenge for first time buyers, most of whom are working with lower budgets.
While most lenders are now offering 95% mortgages to encourage first time home buying, there is a limit to the amount house hunters can borrow, thanks to lending caps that were introduced in 2014.
These issues present an even more complex set of hoops through which to jump than that which existed prior to 2020.
Mortgage Rates will Remain Competitive
Following on from the above point, in order to balance out the increasingly exclusive prices of the UK property market and keep things moving freely, it seems that the highly competitive mortgage deals currently being offered by certain lenders are destined to remain available for some time yet.
Smaller deposits will continue to be welcomed, making 90-95% mortgages the norm for many. This is intended to increase buyer confidence and soften the blow for first time buyers.
It is worth noting that there are still numerous unknowns that have the potential to affect the ongoing health of UK property in ways that have not yet been foreseen.
The above predictions have been presented based on current information – but there is still the possibility of significant change.