How a year of lockdowns has impacted the UK property market
After three national lockdowns and a number of local lockdowns, the COVID-19 pandemic has altered how we live and has had a major impact on the UK property market. On 23 March 2020, Prime Minister Boris Johnson announced the first national lockdown. It’s been a challenging 12 months, and many sectors have had to adapt as the landscape has fluctuated over the past year. In the UK property market, there has been multiple measures and new guidelines to follow due to the pandemic and lockdown restrictions.
However, overall the sector has continued to operate relatively strongly. The first lockdown included a temporary shutdown to the UK property market with viewings and moves only allowed for exceptional circumstances. Building sites also closed for a period as well. In May 2020, Boris Johnson announced a plan for lifting the lockdown. After months of loosened restrictions, local lockdowns and a new tier-system were put place in areas where there were a higher number of COVID-19 cases. A second national lockdown came in November, lasting for four weeks, and a third lockdown was announced in January 2021.
The restrictions are now starting to be lifted over the coming months. During these lockdowns, the property market has remained open. The sector has continued at strong levels as the successive lockdowns has further secured many people’s desire to move. A drastic shift in how we use our homes In the past year, through the national lockdowns and local restrictions, we drastically changed the way we use our homes. Many people have used this time to reassess what they want and need from their homes.
During these lockdowns, everyone who was able to do so was urged to work from home. This has caused many people’s attitudes towards home-working to change. A number of companies have also made groundbreaking announcements on working from home and flexible working for the future. Even as lockdown restrictions start to lift, we will likely see a large number of professionals continue working remotely. Additionally, as we have spent more time at home in the past year, this has caused us to reassess work-life balances and what we want from our homes.
Many have changed their property priorities and location preferences as well. While some looked to move to the countryside, others looked for urban locations near parks and green space. Trends similar for homebuyers and tenants Across the board, people are searching for more space. Home working and home schooling has led to many people looking for dedicated space for an office or extra bedroom. Additionally, many buyers and tenants have been looking for access to a garden or balcony. Top-speed broadband is also important as remote working becomes a longer-term option for many.
Energy efficient properties and smart home technology are also other top priorities. These trends were already well underway before the COVID-19 pandemic, and they are now accelerating. Build-to-rent developments in particular are adapting well to what many people want from modern living. Many feature designated areas for working and provide high speed internet. With new-build developments, most will also have better energy efficiency ratings. And many developers are embracing advanced technology, improving the lives of occupants.
The search for space continues There has been especially high demand for rental properties and properties for sale offering more space. There is a major north-south divide with where buyers, investors and tenants can get more for their money. Regions in the north of England and the Midlands are providing the most value. Markets in the north are well positioned to provide more space for less money. The region will likely be especially attractive for buyers and investors hoping to take advantage of the tapered end to the stamp duty extension.
In the north, 70%+ of all available housing supply is priced at £250,000 or less. Zoopla’s House Price Index shows the search for space inside and outside has continued to push house prices up. The UK annual house price growth has increased by 4.1%. Prices of houses has increased 4.9% year-on-year, while flats have seen 1.9% growth. Gráinne Gilmore, head of research at Zoopla, comments: “The search for space is driving continued demand for family homes, putting more upwards pressure on pricing for houses than for flats.
Houses are also selling more quickly. “The prospects for the housing market over the next year have improved on the back of Budget. The continued search for space, the stamp duty extension and mortgage guarantees will support activity levels and headline house price growth up to the end of Q2 2021.” Source: How a year of lockdowns has impacted the UK property market