21 May

Pandemic Property Market

Pandemic Property Market

It has been an interesting year regarding the property market nationwide with a lot of ups and downs across the economy and the knock-on effects on the housing market. Rarely does history repeat itself so again we are in a unique time with unique circumstances and unique markers. It is thus near impossible to predict what may happen in the far future, but the near future is somewhat easier to predict as market changes tend to happen quite slowly, disregarding a sudden lockdown freezing the whole country! One way to predict and see patterns, is to go back and see the train of events that led us to this point today. Lets go back to February 2020.

February 2020
All about Brexit and the potential impact of that. There was talks about the tax changes that were happening and thus the effect of it deterring landlords. Stock was low and lower levels of stock were entering the market, supply was generally slumping below demand which was pushing up prices. Greater London rents were up, some boroughs seeing increases of 20% from the previous year. Scotland and Wales were doing better than England, generally positive increases all around. In the background though, the pandemic was slowly hitting the world.

March 2020
The country and the world locks down and the streets turn into ghost towns. The whole country is frozen, industries including the property market and associated industries are frozen. Stock is still low but everything is frozen, both new supply and demand.

April 2020
Lockdown continues, stocks are also crashing which may be leading investors to go to more stable investments such as property. The high rents we saw in London have stopped, new sales instructions collapses and home prices slipping slightly across the board.

May 2020
Restrictions are slowly lifting with people slowly going back to offices, new sales instructions are returning but slowly. Due to the low stock, vendors are asking for higher prices. 90% mortgages are withdrawn from the market.

June 2020
We see prices remaining stable and high given the lending restrictions and rising unemployment. Supply returns slowly to the market and London has the greatest number of new listings compared to other regions, while Scotland and Wales are still suffering because of longer lockdowns. The frozen months of lockdown created a backlog which starts off slowing coming back to the market and increases into summer.

July 2020
The stamp duty holiday comes in, a temporary tax break for properties up to £500k. New sales instructions increase but they are still lower than the previous year. Increased demands snaps up whatever property is available, the time that properties stay on the market is slowly decreasing. Greater London shows an increase in rental property supply and lower demand compared to the rest of the country which is crushing rents.

August 2020
Sales instructions continue to increase compared to the previous year, London is excessive though with new supply and yet nationwide the stock is still lower than last year. Mortgage approvals are good. Due to the Covid rules, we see airbnb short lets returning to the market as long lets. Habits are now changing and seen to be the thing for the near future, garden space is required and more space indoors as people work from home. In London, flats comprise 78% of the property for sale indicating a lifestyle shift and an exodus from urban living.

September 2020
Further increase in new sales instructions, with vendors still bullish with their pricing. The divide between the north and south of the country is evident, the north is doing well staying relatively balanced in price growth and demand, while the south is oversupplied and demand is falling.

October 2020
Prices are still strong, buyer demand eats into whatever low stock there is. New sales instructions continue to slow except in London. The north of the country is doing very well with the figures. As we go into a second lockdown, the property industry remains open.

November 2020
We see seasonal dips in pricing but marginal. The sales supply across majority of England and Wales has reduced, and the supply in rental sector is still down which is forcing up rents across the country but we begin to see stability. All except London still where supply is high and demand is low.

December 2020
As the year ends we see similar trends continue. Generally the market outside of London is buoyant, on the rise and positive but there is potential concern that it is artificially growing with stamp duty holiday, low interest rates and cheap credit, and that the extra incentives aren’t necessarily going to solve the issues of the London exodus pushing the demand to other regions and low supply which is also pushing prices up. 

January 2021
Lockdown is reducing the supply of new listings, this is evident in all regions except Greater London. This adds to already low stock which continues to support prices and gives vendors the continued confidence. Rents continue to rise nationwide except London where they continue to crash. Stamp Duty Holiday potentially comes to an end in March so momentum slows down a bit .

February 2021
New instructions remain low due to lockdown, social distancing and slow down of momentum. The north is still pretty strong but stamp duty holiday extension is announced and 95% mortgages backed by the government come in. The continued rising rents may cause some landlords to rent instead of sell.

March 2021
Total stock of property across the country has fallen to an all time low of the last 15 years. The new monthly supply is lower than expected creating competition, all except London where supply remains higher than demand pushing down rents and sales prices. In March alone however, there was a reported £11.8 billion of lending.

April 2021
Stock has dropped again, with no sign of rents stabilising in London. Even given the surge in mortgages and extension of stamp duty holiday London is still slow in sales and rents are low. Across the country, new supply is also down further driving up prices in both sales and rentals.

Image: Lina Kivaka

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