Peter Joseph is CEO of The Moving Hub
Every market has taken some sort of knock since the appearance of the devastating COVID-19 virus, including the property market. At the height of the lockdown, property experts predicted that UK house prices could drop by as much as 10%.
However, with chancellor Rishi Sunak’s recent announcement that the stamp duty threshold will be raised from £125,000 to £500,000 until the end of March 2021. Shortly after, enquiries for homes valued between £400,000 and £500,000 increased by a whopping 49%.
While the house market can’t be characterised as fully functional, since buyers cannot see their prospective investments in person, experts predict that post-pandemic property requirements are going to change dramatically.
Homes with gardens
The global realisation that invisible viral dangers lurk everywhere has sparked another wellness revolution. Multivitamins, hand sanitiser and other wellness products have seen huge sales growth, and expectations are that humanity is going to be weary of high-risk environments for a long time to come. People will want to ensure that their families are able to live and thrive in healthy spaces.
Over 81% of surveyors and estate agents predict that the UK property market is likely to experience a spike in demand for homes preferably surrounded by flora and with their own gardens or balconies over the next two years. However, what isn’t certain is how rapidly the property development side of things is going to scale along with the new demand.
Apartment block exodus
Property buyers are reassessing their needs, as spending any amount of time in residential property common areas (lifts, foyers, passageways, etc.) has become a high-risk activity. People know that living in very close proximity with one another puts them in danger of contracting illnesses, which is why property experts predict that an exodus of apartment buildings is on the horizon.
De-urbanisation is an understandable inevitability, as people attempt to escape the toxic city centres in search of wide open spaces. 68% of UK property professionals predict that properties with more privacy and less communal spaces will become extremely desirable. Therefore, homes in tower blocks are expected to be less in demand.
The overall sentiment for the remainder of 2020 remains bleak among economists, with the vast majority predicting declines of varying magnitude. However, not all financial thought-leaders think it’s all doom and gloom for property in 2020.
· RICS The Royal Institute of Chartered Surveyors found, in a June study, that a net total of -12% of surveyors expected prices to fall in the second half of the year. This compared to -43% when survey respondents were asked in May.
· Halifax Property prices have, according to Halifax, fallen at the sharpest quarterly rate since 2009. This paints a grim picture when you add that property market’s value sunk for a fourth consecutive month – the first time this has happened since 2010.
· Savills Some double-edged optimism came from Savills, who predict that London houses could fall 2% in 2020, but will return to growth figures in 2021. The estate agents estimate that many foreign buyers are, “yet to return to the market.”
· Knight Frank Knight Frank sees UK house prices falling 7% in 2020, with a 2021 recovery of around 3%. Other forecasts include a 5% drop in price for central London property, as well as a 5% price decrease for houses in prime outer-London locales.
· Barclays Most optimistic of all are Barclays, who are of the opinion that UK house prices will grow in 2020 by 0.6% – with a 2% recovery predicted for 2021. Mid-year predictions put the worst-case scenario for 2020 at a price drop of around 1.5%.
The conveyancing industry and overall property market in undergoing an evolution, as property buyers and sellers change their preferences.
Get peace of mind by partnering with property professionals who change with the times, and can look after your best interests when you decide to buy or sell a property in the “new normal”.