COVID has hugely impacted the property investment market throughout the UK over the last year and a half. As the pandemic went on, house prices continued to grow despite the difficult situation the world was facing.
Property Demand and Lockdown
The UK government announced a national lockdown on the 23rd of March as cases continued to rise throughout the country. Parliament demanded that all retailers, hospitality, and other small businesses to close and for all staff to work from home if possible.
The stay-at-home rule was enforced for all non-essential workers, this saw a decrease in the number of property viewings and a shift to online viewing. This trend led to a reduction in demand for property from both investors and buyers in spring 2020. As summer began, property prices began to rise again by an average of 1%. This increase triggered house hunters and investors to begin investing again, at this point buyer demand increased by an average of 80% across the country.
Summer 2020 also saw an increase in rental demand. Buy-to-let properties saw an increase in interest from those looking to invest and capitalise on the challenges the property market was facing as a result of COVID-19. Unfortunately, it didn’t look like the end of the pandemic was in sight in 2020 and as a result many investors began to look for properties that suited ‘lockdown living’. With the UK population forced to spend the summer at home, many began to look for properties with outside space, home offices and proximity to amenities like supermarkets and pharmacies. This led to a reduction in demand for apartments and an increase in demand for houses with gardens.
The stamp duty holiday scheme was announced in July by the government. This scheme saw a further increase in buyer demand within the UK as the land tax was temporarily reduced increasing the appeal of property investment.
Surge in property prices as COVID continues
Autumn 2020 saw one of the biggest increases in month-on-month property prices. In the last 5 years, property prices in London have increased by an average of 13.44%. Whilst the last 3 years have seen an increase of 7.2%. It is predicted that London’s property prices will continue to rise by an average of 1% per month.
Property prices all over the UK began to rise faster than average as those in apartments and city centres looked to move to suburbs and areas with more green space to enjoy. With travel bans in place, people were choosing to spend money on renovating their properties or moving to a new home. This led to an increase in demand buyer demand, driving property prices even higher. This new way of living and flexible living has left investors looking outside of London for property investment as consumer needs and demands have changed. Property Deals Insight online tools are a great resource if you are looking to research the best areas outside of London for investment opportunities.
A change in interest as lockdown ends
As lockdown eases and the UK rolls out its vaccination program, property investors have a choice to make as to whether to invest in property that suits pre-covid living in cities like London or to invest in properties that are suitable for our new way of living with flexible working and more time spend at home. It is predicted that London will make a full recovery from the pandemic and so will the property market. We expect property prices to continue to rise as we return to a pre-covid world.