Covid-19 and it’s effects on the property market
Matthew Cullum Property Blog
The Property Market in 2020 After COVID-19 and Its Effects
When the coronavirus hit the U.K., the property market had already suffered a major blow from Brexit and was on its way to recovery. The pandemic disrupted the economy and brought the property market to a standstill.
Since the first case in March, and the subsequent lockdown, the industry experienced a decline in demand for houses for four consecutive months. During this period, the number of listed houses also went down drastically.
When government regulation eased in June, the property market reopened. Estate agents and sellers were allowed to offer in-person viewing. Buyers, on the other hand, were free to proceed with their relocation plans.
The post lockdown period saw a drastic increase in demand in the property market. The spike was due to the cumulative demand during the lockdown period as the limited movement hindered potential buyers from viewing properties. An increase in demand always leads to a rise in prices, which has been the case with the property market post the lockdown.
Property experts have predicted that property prices will bounce back to the normal price once the demand is exhausted.
Temporary Stamp Duty Holiday
The government raised the stamp duty to rejuvenate the property industry during these hard times. In Northern Ireland and England, the cut was raised to 500,000 from 125,000. This means if you are purchasing a home, the first 500,000 payment of the property is stump duty-free. In essence, the government used the stump duty cut to encourage people to buy homes before the end of this financial year, as the temporary cut will be in force until April 2021. Register for Matthew Cullum property information and covid-19 related property information.
The demand in the previous months is closely tied to the stump duty cut announced on 8 July. It seems potential homeowners have grabbed the opportunity in fear of missing out on this one-time offer.
The increased demand has put a strain on the homeownership process. Estate agents are struggling to process legal documents on time. There is also a lag jam in mortgage evaluations, further delaying the process.
Since housing is a critical part of the economy, the stump duty holiday not only encourages people to buy homes but also has a ripple effect on the other sectors of the economy. In a new home, someone might opt to renovate, change the utilities, or buy furniture, contributing to other sectors of the economy.
The demand in the property industry is predicted to fluctuate in the coming months, given the uncertainty of these times. Experts argue that there is a possibility of the housing demand going down once the stump duty holiday ends. Another reason for this is the potential increase in the unemployment rate.
Matthew Cullum Property-The Current Property Market Situation
With the new lockdown regulations, the government has made it clear that estate agents can only offer virtual tours to potential home buyers. The parties can only move to an in-person view once the potential buyer has confirmed that they are interested in buying the home. In-person viewing requires the two parties to maintain social distancing, sanitize, and wear a mask where close interaction is inevitable.
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