2020 was undoubtedly a unique year by any standards. COVID-19 took the world by storm, forcing humanity to rethink its definition of normality and disrupting the global economy profoundly.
In the UK, the housing market was one of the most affected sectors of the economy. The factors affecting this sector include:
- The pandemic
- The success of the vaccine
- How businesses will act post-pandemic
However, contrary to many expert predictions, the global pandemic has not spelt doom for the property market. On the contrary, demand for housing has increased tremendously, and it does not seem likely to wane any time soon.
Pick My Pad’s Walkden estate agents look at the factors driving the surge in property values and predictions about its sustainability.
What is Driving the Surge in Property Valuation?
The primary reason for the drastic increase in the valuation of property is the chancellor’s stamp duty holiday. The government introduced this tax holiday to maintain stability in the housing sector, and the plan is working well.
The government is keen to maintain stability in the housing sector to avoid a severe crisis, as was witnessed in 2008. This single move has played the most significant role in ensuring that property value did not plummet due to the pandemic.
Additionally, banks throughout the country are being pragmatic and not increasing interest rates for mortgages. This has undoubtedly played a role in increasing the value of properties because buyers are not afraid of seeking loans to finance property purchases.
Moreover, people have been saving more over the past year than they did previously. This behaviour has also played a part in ensuring that the value of property keeps going up.
The pandemic itself has also led to increased valuation of the property. This is because of working from home, which has forced people to redefine what they want in a home.
For many city dwellers, staying at home for days on end led to the appreciation of space in a house. Consequently, many people are looking to move to the suburbs to have enough space to work comfortably from home.
On the flip side, property in the city has seen a drop in valuation, reflecting the decline in demand for homeownership in urban areas. People are no longer concerned about commuting for hours since they are working from home, which further decreases the lure of city property.
Is the Surge in Property Valuation Sustainable witnessed by Walkden estate agents?
According to many financial experts, the value of real property will level off in 2021. This is partly because the stamp duty holiday is set to expire by the end of June, making the transfer of property quite expensive.
However, demand for suburban property is set to continue increasing since the viability of working from home has been tested and proven. Therefore, people are bound to continue with the practice long after COVID becomes a thing of the past. If you want to sell your house fast, this is certainly the time to do it.
Contrary to many predictions, the value of property in 2021 has been increasing steadily despite the pandemic. This can be attributed to government policies as well as consumer behaviour. However, property value is set to level off in 2021 as the dust settles post-COVID.
To find out more, or for help and advice in any other property related matter, call our Walkden estate agents on 0161 790 3999 or use the details on our contact page.