This is a collaborative post: The Prime Minister recently issued a speech whereby he introduced new restrictions throughout England. There would be a curfew in restaurants and pubs. People would also be encouraged to work from home wherever possible.
The housing market has become stagnant because of the first lockdown that was implemented in March. Most people are afraid that a second lockdown would have more adverse effects; this is what a second lockdown would mean for the UK’s house prices.
During the first lockdown, the housing market froze, and the house prices stagnated. The government had issued restrictions on the real estate sector, meaning the sellers would suspend activities such as viewing houses. The lack of activity means house prices were affected.
Buyers could not view houses because of the lockdown. Nevertheless, white virtual viewings were available; however, they could not satisfy the potential buyers. The inability to view the properties in person could trouble the surveyors since they could not perform the valuation physically.
Most sellers opted to delay the sales until the government lifts the lockdown. According to recent estimates, the sale of more than 52,000 houses has been halted because of the current lockdown.
In June, the lockdown was eased, and numerous sellers managed to sell their homes. In regions such as London, there was an upsurge in house prices.
There was a huge demand, and the expectations of the buyers had changed. There was also the potential to save on taxes since there was a Stamp Duty holiday. The only issue that may come about is a second lockdown.
If a second lockdown is imposed, experts argue that the government should restrain from imposing restrictions on the real estate sector.
There is uncertainty about whether a second lockdown is necessary if the present restrictions effectively combat the current pandemic. Some estate agents are fearful that a lockdown will come with more restrictions on the process of acquiring a home. Such limits include ensuring the number of people viewing the house at a go has been reduced. House viewing can be halted altogether.
Some experts have argued that the government should lift the housing sector restrictions if there is a second lockdown since the property market is among the most important industries within the nation. For instance, the government managed to reopen the property market during May, and that was weeks before the lockdown restrictions were eased on different industries.
Areas that were locked down, including Leicester and Birmingham, were not affected by new restrictions with regard to the property market. Such limits include banning the viewing of houses.
Experts hope that by showing such support, the government will ease the housing market restrictions if another lockdown is implemented.
How another Lockdown May Affect Market Trends While Re-evaluating Their Needs
The speculations there might be a second lockdown is why experts say there is a rise in house sales. The first lockdown forced numerous homeowners to reassess their housing needs. Some people needed a better ‘home office environment’ since it would enable them to work from home as they desired a more extensive space outside and inside the house, including the presence of a more extensive garden.
Since people were advised to work from home, their commuting requirements also changed, and that meant they were looking for homes far away from the city. They preferred rural and suburban areas.
Research showcases that UK residents are willing to live at least 56 miles away from their workplace. Before the lockdown, people were comfortable living 23 miles from their workplace.
Homebuyers can also take advantage of the Stamp Duty Holiday since it can save up to 15,000 Euros in the form of tax.
If the second lockdown lasts longer than the first one, the effects on the property market will be adverse because of the economic instability that would come about. If the unemployment rate were to rise, there would be an increase in the number of houses being sold in the market since people would be pursuing avenues to save money, and financial institutions may also repossess some homes. There would be a buyers’ market, and the prices would go down.
Conclusion
With economic stability, lenders would become risk-averse, and that means prospective home buyers would have a hard time applying for a mortgage successfully. Also, the Stamp Duty holiday will end in March, and that means there will be no more tax incentives for people who have acquired new homes. Such factors would bring about a decline in the number of homebuyers in the market