The Impact of Covid-19 on The London Property Market
How Has Covid-19 Impacted The London Property Market?
The answer, of course, is yes. But in a positive way.
Following a hard few months for Londoners during lockdown, the property market was able to re-open on the 13th May 2020 and pick up where it left-off in March.
Once lockdown started easing, Bective had to quickly adapt its practices to accommodate the strict measures imposed by the Government to keep our clients and community safe, and you can find more practical information about how viewings, valuations and maintenance visits are currently working by using this link.
With logistics in place, and a pent-up demand amongst hopeful movers, we saw a significant increase in the number of buyers and tenants registering with us immediately after the Government’s announcement. Presently, this demand shows no signs of slowing as we enter the summer period. Some buyers are registering their interest in anticipation of the market continuing to pick up pace, but many are motivated to get moved right now. In fact, we’ve been consistently overwhelmed by the renewed positivity in the market and the swathes of sellers and landlords who are now capitalising on this sense of urgency. As I write, activity has already bounced back to pre-COVID levels.
The additional stamp duty holiday, put in place to reinvigorate the property market, has also encouraged many buyers (and sellers) to consider their next move. Stamp duty has been temporarily removed on properties up to £500,000 in England and Northern Ireland until 31st March 2021. And according to Rightmove, enquiries for homes priced between £400,000 and £500,000 surged 49% immediately after the announcement.
How Will Covid-19 Impact The Number of Property Transactions In London?
Initially, most assumed the stamp duty holiday wouldn’t impact the London property market as the average property value in Prime Central London far exceeds this threshold. However, according to Zoopla, London has benefited more than other areas, with reported ‘sales agreed’ jumping 27% in the capital in the first two weeks of the stamp duty holiday; in contrast to little impact elsewhere in the country.
Additionally, Chancellor Rishi Sunak’s decision to implement a 2% Stamp Duty Land Tax surcharge on international buyers of UK real estate will influence upcoming activity and we anticipate an increase in transactions from international buyers prior to the surcharge being introduced in April 2021.
Another factor that is clearly having an affect on the number of people making the decision to move, is the realisation that many of us can now work from home. In fact, many of London’s biggest employers have told their teams not to return to the office for the remainder of 2020, and even when the offices reopen, they will be expected to continue working from home for 2-3 days per week. This has shifted the mindset of Londoners, and now makes commuting from further afield much more viable. Indeed, Rightmove is reporting an increase in London-based property searchers looking in areas further from the capital, and we are certainly taking instructions from many sellers who are seriously considering this as an option.
How Will Covid-19 Impact London House Prices?
Chief economist at Nationwide, Robert Gardner has said that “the raft of policies…should set the stage for a rebound once the shock passes” and we can see this happening sooner rather than later. Of course, it’s difficult to predict the future of the London property market, but myself and my colleagues are remaining positive. Generally, house price growth in London is expected to recover and grow by 6% in 2021. [Click here for more information regarding house prices].
Talking about the general economy in mid June 2020, Roger Martin-Fagg, a well respected economist said “…we will see a rapid recovery in the third quarter of this year and the global system itself will be back at 2.5% growth by this time next year.” And I’d like to think the same can be said for the property market. In the meantime, we will continue to sell and let our client’s properties for the highest possible return and protect their hard-earned investments.
Are You Considering Your Next Move?
If there’s anything we can do to support your next move, please get in touch. For reassurance, Bective cares deeply about the health and wellness of our local community and will be taking every precaution to ensure all property visits are as necessary and as safe as possible. In the meantime, our instant online house valuation tool can provide an indicative value of your property.