When the COVID-19 pandemic swept the globe at the beginning of 2020, it was impossible to foresee the changes that it would wreak upon our society. From global lockdowns, closed borders and economies crashing, 2020 has been a year of uncertainty across the board with many unforeseen side effects still to become apparent.
One such surprising side effect is the positive reaction the lockdown has caused within the UK housing market. Despite the UK entering a nationwide recession off the back of the economic lockdown, the housing market is booming with properties selling faster than before the pandemic struck according to a new report from Zoopla,
According to the same report, the bulk of the demand appears to be for three and four bedroom homes while four and five bed houses are selling 33% faster than in 2019. Since lockdown, buyer priorities have shifted. While previously homes close to work or commuter services were popular, buyers are now favouring homes with more outside space and access to nature. Larger homes are proving more popular due to the potential for home office space, as well as more options for families to spread out if another lockdown situation were to occur.
The Government’s stamp duty holiday is also having an effect on demand, with buyers taking advantage of the opportunity to make a saving. But what does this mean for the wider housing market?
While people leave the cities in favour of larger homes in the country, more properties in the city, and more smaller homes, could come onto the market that are suitable for first-time buyers and those with smaller budgets who currently struggle to get a foot on the housing ladder.
This may spell good news for the housing market in the short term. But unfortunately, it doesn’t alleviate the pre-existing pressures that the industry faces. There continues to be a clear supply and demand crisis across the country and while this mini-housing boom may disguise that in the short term, ultimately there is still a clear need for new homes to be built across the UK to keep up with the true demand.
This article is for educational purposes only and does not constitute investment advice. This article does not amount to an invitation or inducement to buy or sell an investment nor does it solicit any such offer or invitation in any jurisdiction.
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