E&R

How is Covid-19 affecting the property market?

The coronavirus pandemic has really given the world a shake up. The year 2020 won’t be one easily forgotten in years to come. It will be remembered for its countless lockdowns, social distancing, and the way consumers dramatically adapted to a virtual life. Globally, markets are still seeing significant rises in online shopping and online education.

Throughout this challenging time, the UK property market has been able to maintain its stability.

In November 2019, UK house prices reached an average of £250,000 for the first time in history. According to research, the price growth per month is 0.8%.

The market is noticing unusual growth levels of demand and the annual house price inflation grew to 7.5% in October 2019. One explanation behind the jump in house prices is the Stamp Duty reduction.

In England and Northern Ireland, the tax-free threshold of £500,000 will now remain until 30 June. Between 1 July and 30 September the threshold will be reduced to £250,000, before returning to £125,000 for home movers from October.

Whilst the extent of the cuts vary across the UK, buyers can potentially save up to £15,000 in tax if they move before the deadline.

Provisional data from HMRC shows that 121,640 sales went through in January. This is up 24% year-on-year.

Before it was announced that the Stamp Duty holiday will be extended, Rightmove forecasted that house prices will rise by 4% this year. It predicts a lull once the Stamp Duty cut ends, but says this won’t be ‘make or break’.

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