The Housing Market in 2021 and COVID

The COVID-19 pandemic has affected pretty much every facet of our lives over recent months, but how has it affected the UK housing market? Mortgage consultancy, True Advice Financial Services takes a look back, and forwards at what has happened and what buyers, sellers and homeowners can expect over the coming months.

Surprisingly, the UK property market enjoyed a mini boom in the second half of 2020, partially helped by the Governments temporary stamp duty cuts, which are set to end in April 2021. All property markets in England, Ireland, Scotland, and Wales are open. This means Estate Agents are conducting viewings and buyers are able to move, despite the current lockdown measures.

The UK property market has actually been on the rise since July 2020 thanks to the stamp duty cuts and buyers moving home before March 31st, 2021 could potentially save up to £15,000 in tax, so if you are thinking of moving, now is the time to act, although time is now very tight. According to HMRC, house sale transactions have risen significantly, with 115,190 going through in November 2020, an increase of 19% year-on-year.

So, how have house prices changed over recent months? Well, it depends who you ask. The Land Registry says the average UK house price has increased by 7.6% year-on-year to £249,633. Rightmove’s index is based on asking prices not sales and suggests the year-on-year increase is more like 3.3%. Nationwide’s figures based upon mortgage lending suggest 7.3% and Halifax say 6%. Taking the average of them all gives you a whisker over 6%, so whichever way you look at it so far, the signs are positive.

In all the doom and gloom around COVID-19, it is nice to report that there is optimism around the future of the UK property market at present. Almost all of those “in the know” are predicting a continued increase in house prices of between 2% and 5% into 2021. A lull in the second quarter when the Government stamp duty cut ends, is not expected to have long-term effects upon the market.

It is still possible to find good mortgage deals, although the number of deals available since COVID-19 struck has approximately halved. Buyers with deposits of 5% to 10% have been hardest hit by mortgage deals being withdrawn, though many banks have started to relaunch 90% mortgages recently. Employing the services of a reputable mortgage consultancy will certainly help dig out those best deals for you.

The impact of COVID-19 and the worlds Governments responses to it, has decimated many industries which is terribly sad, but there is a glimmer of positive news for the UK property market. In a nutshell, the housing market and property prices have ridden the storm reasonably unscathed, thanks to a great extent to the Governments stamp duty cuts. Despite this about to come to an end, the industry buzz continues to be positive throughout 2021 and beyond.