Working from home might be the new norm: what does this mean for the housing market?

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Residential Conveyancing Article

17 December, 2021

The property market has been re-shaped since the outset of the Covid-19 pandemic. There has been an increase of property purchasers and sellers due to the Stamp Duty Land Tax (SDLT) holiday and house prices have risen. The UK's house prices increased by 13.2% at the start of this year to June 2021, compared to last year where the house prices increased by only 3.4% During the pandemic, 19,000 homes were renovated as purchasers have been buying a house, renovating it, and selling it as soon as practicable. Three-quarters of those homes were sold for more than they were bought for and investors on average, made a profit of £48,190.

The government announced a Stamp Duty Land Tax (SDLT) cut in July 2020 to help buyers whose finances were affected by Covid-19. Until 31 March 2021, property purchasers did not have to pay SDLT on the first £500,000 of a purchase price. This meant the opportunity to save up to £15,000. Subsequently, the government extended the SDLT holiday until 30 June and again, until 30 September. During this period, property purchasers did not have to pay SDLT on the first £250,000. Therefore, prospective buyers were motivated by the opportunity of buying a house.

There was a rapid economic growth to the UK's property market during the pandemic because of the SDLT holiday and pent-up demand as teleworkers required their very own home office. The housing market and the UK house price increased by 8% in July 2021. The North West and North East, which previously had more affordable options than the South in the property market are now experiencing an increase to the annual house prices. Many businesses have chosen to allow their employees to work from home permanently and hybrid working will be implemented for those returning to the office. Not having to commute as much as pre-Covid times, means enabling people to live further out and explore new places. The shift to working from home will cause house prices to remain unchanged and there will be little division between the North and South.

The busy period for us began in March 2021 as buyers and sellers wanted to expedite their transactions before the scheme was initially due to end. Subsequently, the demand continued when the SDLT holiday extended further. However, even after the end of the holiday, the busy period perpetuates. This is caused by the need for more home office space, low supply, and low interest rates. Buyer demand will always remain as it offers capital growth and security in times of volatility.

For more information contact Michelle Thompson in our Residential Conveyancing department via email or phone on 01254 222349. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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