Covid-19 changed the world as we know it. Sectors and industries all around the world suffered due to the Covid-19 pandemic. All around the world, economies were impacted, businesses were forced to shut down and there was rampant unemployment. The aviation industry was majorly hit, the entertainment industry suffered, the hospitality industry was impacted and the real estate industry took a huge hit. In the UK itself, during the first lockdown, there was a complete ban on real estate activity which took its toll. In this article, we will further discuss how Coronavirus impacted the real estate market in the UK and what the future of the real estate industry holds.
Increased demand in the outskirts and suburbs
In the earlier days, most homeowners and buyers would look for rental properties and homes that were close to their place of work. Usually, these properties were in the heart of the city centre or very close to the city centre, which is why there was a consistent increase in the demand and price of property in the city centre. However, due to the Covid-19 pandemic, we saw significant demand for properties in the outskirts and suburbs. Since the average price of properties in the outskirts and suburbs is relatively cheaper than the average price of properties in the city, buyers could get spacious homes at more affordable prices. If you’re looking to shift into an upcoming suburb such as Orpington, you should get in touch with estate agents in Orpington today.
A drastic change in buyer priority
As more and more people started working from home there was a major shift in the priorities of buyers and homeowners. Now, as people started spending more time at home, there was a growing need to improve their lifestyle. This led to potential buyers and homeowners looking for bigger and better homes. Potential buyers started looking at properties with spare bedrooms or garage spaces that could eventually be converted into home offices. Also, there was a significant increase in demand for properties that had private gardens, terrace gardens and outdoor spaces as people no longer wanted to be cooped up in their homes.
Increase in Buy to let properties
Due to the change in the priority of the buyers and the increase in the demand for properties on the outskirts, there was a significant increase in the number of buy to let properties. Simply put, buy to let is a concept in which homeowners upgrade their homes by moving into a bigger place on rent while giving out their own home on rent. As homeowners who live in the city started looking for bigger homes with private gardens and home offices, they chose to move out of their homes and live on rent. So, instead of selling their homes and moving out, homeowners decided to live on rent while earning a rental income from their city centre properties.
Change in property viewings
In the earlier days, potential buyers and real estate agents would go house hunting. This meant viewing multiple houses in a day and attending several open houses until the buyers found a property they like. However, due to the Covid-19 pandemic, the way we view homes has totally changed. Now, potential buyers can view houses online from the comfort of their homes. Due to the advancement in technology, potential buyers can now view properties using video tours, 360 virtual videos and through pictures online. Once the buyers shortlist a few properties that they like, they can then plan a visit to those properties with their real estate agents. In 2021, and in the near future, virtual viewing is going to become the norm for house hunting.
Introduction of stamp duty holiday
Due to the Covid-19 pandemic and its devastating impact on the real estate market, the UK government introduced the stamp duty holiday in July 2020. In essence, the stamp duty holiday was a temporary suspension of stamp duty on the purchase of a property. The stamp duty holiday allowed buyers to save thousands and thousands of pounds on their purchase, which was a way to boost the buyer’s confidence and help revive the real estate market. Seeing the success of the stamp duty holiday which was originally supposed to end in March 2021, the UK government further extended the stamp duty holiday till September 2021. In the long run, the stamp duty holiday was actually very beneficial for the real estate market.
Initially, experts predicted that the Covid-19 pandemic will lead to the downfall of the real estate market in the UK. While some experts believed that the prices of real estate will rise drastically post the pandemic in 2021, others believed that there will be a significant drop in the average price of property in 2021. While no expert can predict the future of the real estate market, it is safe to say that Coronavirus certainly took its toll on the real estate market in the UK.
Categories: Business, Cities, Urban Planning
