After nearly 12 months of lockdowns, restrictions, and huge changes in how we live our everyday lives, it seems that there may be a happy ending for 2020 after all. Following the UK government’s announcement that a Covid-19 vaccine has now been approved for mass roll out, we look at the effect Covid-19 has had on the UK property market during this year, and what impact the vaccine could have on the market going forward.
Overall, it important to note that in general, the UK property market has managed to weather the storm of COVID-19 quite successfully. Latest data from the Office of National Statistics (ONS), shows that despite the economic downturn that Covid-19 has caused across the world, UK property prices increased on average by 4.7% over the year so far, with regions such as the North West seeing growth of 6%.
For investors who got into the market pre-COVID, and in the early part of the year – huge gains have been made both in terms of rental yields, and capital appreciation. Looking forward to 2021, we look at the positive impact the impending Covid-19 vaccine could have on the UK property market – and why you should take advantage now before missing out on the next period of growth.
One of the biggest disruptions to the property industry during the height of the pandemic back in the spring, was the temporary shutdown of construction sites across the UK. Due to the strict guidelines on social distancing, the industry was forced to suspend construction. During the summer, following a fall in cases across the country, construction firms could go back to work – albeit under strict social distancing rules that meant less people were allowed on site.
As the Covid-19 vaccine is rolled out in 2021, social distancing measures will be relaxed and eventually not required at all – which means construction sites can get back to normal and progress can get back to pre-COVID-19 levels. For those developers who have found themselves significantly behind in the construction of their properties, every effort will be made to bring completions as close to back on track as possible to ensure delivery of developments does not slip to far behind.
Unlike other industries in the UK, property sales and lettings businesses have been able to adapt well to the disruptions caused by Covid-19. Interest rates have been at an all-time low – making it a great time to secure a mortgage or other finance to purchase a property. With viewings being held remotely via video chat and move-ins being carried out safely and securely – both key in keeping people moving.
What’s more, the UK government have taken great steps to ensure that the property market stay buoyant, with no initiative more successful than the Stamp Duty Land Tax holiday – a move that saw the removal of SDLT charges on properties up to £500,000.
All these factors have meant that moving to a new house or buying a new investment property became a very attractive prospect – which in turn, fuelled demand, and that in turn fuelled a rise in house prices. In fact, this year, Rightmove reported that they had seen the biggest rise in a decade for people looking for property in the UK, with some regional cities like Manchester and the surrounding areas seeing properties sell for up to 60% higher than the asking price.
Ultimately, the UK property market as a rule responds well to positive news, and as restrictions lift, and more properties are brought to market through accelerated construction on sites, it is anticipated that demand will also increase.
Investors who have traditionally invested in stocks, shares and commodities, have seen huge amounts of money wiped off the value of their portfolios because of the pandemic. Having weathered the storm, they will be looking for more secure and stable investments for the future. As one of the safest, and least volatile asset classes around – property will become a staple feature in the portfolio of many investors who had previously not considered it.
In addition, investors who have previously invested in property, but who have remained cautious during the pandemic and sat on their capital, waiting for the uncertainty to pass, will also start to move and invest again.
At Beech Holdings we have specialised in developing, selling, and managing UK property for 20 years. Right now, we have several investment opportunities that you can take advantage of that will ensure you always have a passive income being earnt no matter what the economic landscape looks like. Including:
Weavers House at Cross Quays Square
At the gateway to Media City & Salford Quays
The most sought-after area of Manchester City Centre