When you think about it, it is incredible how resilient the UK housing market has been in 2020 during the Covid-19 pandemic. We hope that you can agree with us that there are a number of positives that we can all take. It has been a very challenging year for the housing market.
It all started so well in January 2020. The UK property market was buoyant and then came the coronavirus and the government imposed lockdown in March. There were no property transactions for at least two months and the building of new homes temporarily ceased as well.
Pent up Demand after Lockdown
There was an easing of the lockdown in May 2020 and this resulted in a flurry of property transactions due to the pent up demand. People were frustrated that they couldn’t buy and sell property in March and April and as soon as the market opened again there was a surge in activity.
In July 2020, the Chancellor announced the stamp duty holiday, which intensified the demand for property transactions. The stamp duty holiday continues until the end of March 2021. The coronavirus was still a threat in the summer months, but buyers and sellers took the necessary precautions and the market continued to flourish.
Covid-19 Second Wave
There was no real let up with the pandemic and certain areas of the country had to deal with local lockdowns, which put a dent in UK property transactions in those areas. The government announced a second lockdown in November 2020 because the coronavirus case numbers were still on the rise.
The difference between the first and second lockdowns is that the property market was still open the second time around. As long as buyers and sellers observed social distancing rules and took other precautions such as wearing facemasks it was fine.
Now the country finds itself in a four tier lockdown situation. This is more stringent than before and has had an impact on property transactions. But the good news is that the first Covid-19 vaccinations began in December so there is a higher level of confidence in the market about the future.
UK Housing Market Performance 2020
It is fair to say that the UK housing market performed much better than the experts were predicting throughout the coronavirus pandemic in 2020. So much so that the rebound period after the first lockdown was faster than anyone could have guessed.
Demand for housing in the UK has hit record highs over the last few months. This has resulted in house prices increasing every month over 2019 figures. During 2020, the demand for housing reached the highest level for a decade.
Why is the Demand so high?
The pandemic has forced a lot of professionals to work from home. This has changed their thinking about the home that they live in and now many are looking for a home with a dedicated room they can use as an office.
Not only that, but also more families have had to spend a lot of time at home in 2020 and they now want more space. People have changed their minds about where they want to live as well. Instead of being in the middle of cities, some want to move near to a park for example.
The other factor that you cannot ignore is the ultra-low interest rates and the availability of great mortgage deals. Approvals for mortgages in 2020 are now at the highest levels for 13 years. A stamp duty holiday added to the increase demand.