British Property Boom Amid Pandemic
Experts and analysts chime in on the boom of the British property market and how the pandemic woes and government intervention have not halted sales.
The British real estate market is defying a purported house price crash even in the midst of a global pandemic.
There are some pointers to observe in Britain’s property market; positive signs of a housing boom. The nation’s largest homebuilder Barratt Development posted an almost doubling of profits to £812 million amid gloomy forecasts and the worsening pandemic that has plagued the country hard.
Property experts are witnessing hard-to-sell homes being snapped up in a year-long break-neck sales record. In areas of high demand, even properties that looked like the last cookie in the jar spent mere days on the market before being snapped up by desperate buyers. Thus, proving a house price crash isn’t likely. Though property sales screeched to a halt during the first lockdown in early 2020, the proof of this summer’s harvest is the brisk property sales. This and the tech industry has emerged as one of the pandemic sectors fecund with revenue.
Andrew Wishart, a property economist at consultants Capital Economics, said: “With the amount of secondhand stock on the market currently extremely limited, house prices could continue to surprise on the upside.”
Other property experts may cite that places such as Cornwall and towns along the south coast may witness their prices about to burst, but the banks and local agents are more convinced that the current property momentum will keep prices afloat for some time.
While many homeowners fear about the end of the British government’s stamp duty tax break might prompt a fall in the number of homes changing hands during July, thereby bringing the market to a screech. However, mortgage lender Nationwide points to data that is otherwise. In August 2021, it was reported that annual house prices increased to their second-biggest monthly rise in 15 years.
“Prices were up 11% a year ago and remain about 13% above pre-pandemic levels,” cited by Nationwide on official data.
Bolstered by the report from Britain’s biggest homebuilder Barrat Developments where a near doubling of profits over the last year to £812 million on 2 Sep 2021, it was also noted that viewing requests for new homes for the next six months were in demand. While homeowners sing about rising prices for homes, the charity Housing Justice mentioned that the boom encouraged private landlords to sell up and leave tenants looking for another place to live, further adding woes to homeless people and the private rental sector.
Wishart opined that the upcoming furlough scheme ending on 30 September may push unemployment higher but would only cause a small risk to rising prices.
A year ago, the property market in Britain painted a different picture especially in May 2020. The first lockdown forced homer buyers to view properties only virtually, while sellers took their homes off the market and sales dipped. Two months later, British politician Rishi Sunak, who serves as Chancellor of the Exchequer since 2020, responded to calls for government support by extending the help-to-buy scheme for first-time homebuyers, thus cutting stamp duty on homes worth less than £500,000.
Interestingly, figures for August 2020 revealed a spectacular turnaround. Mortgage approvals jumped from 66,300 in July to 84,700, according to Bank of England figures, their highest level since October 2007.
Property analysts commented that the government’s actions by the Resolution Foundation thinktank contended about the £4 billion stamp duty subsidy was wasted on the intention of sparking a market to life when it was already on the road to a robust recovery.
Buoyed by ultra-low interest rates, the demand for luxurious and spacious British abodes during the pandemic isn’t waning. Most property experts attest that the first lockdown of the British nation signalled a gloomy outlook for the property market as people hunkered down at home, but as early as June 2020, it was resolutely clear that home buyers were eager to purchase properties and location was key.