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Early Signs of Resiliency
Early signs, however, are showing far more resiliency. In fact, the number of valuations undertaken is up 38 per cent since Boris Johnson announced the UK will go into another lockdown.
There has been a slight drop in property viewings overall. With Knight Frank announcing a drop of 15% compared to the week before the announcement. This can be put down to the fact that travel is more restricted than it was previously. Despite the decrease in viewing figures, the estate agent has confirmed that the number of exchanges has increased by 11%. Indicating, people are keen to make use of the ongoing stamp duty holiday.
Tom Bill, head of UK residential research at Knight Frank, said: “The early days of a second national lockdown in England bear little resemblance to the first for the property market. Agents have remained open and the high volume of transactions agreed since the market re-started in May will continue to progress”.
He went on to explain that, should the second lockdown not be extended past its December 2 date, it should do no more than put a “small dent” in the UK property market.
Is a Vaccine in Sight?
Just over a week after the Prime Ministers announcement arrived the news that a vaccine for Coronavirus is nearer than ever before. The preliminary tests, undertaken by developers Pfizer and BioNTech, show the vaccine can prevent more than 90% of people from getting Covid-19.
Their vaccine has been tested on 43,500 people in six countries and no safety concerns have been raised. This is a monumental development in the worlds quest to get back to normal, with scientists thought to be extremely optimistic for the first time since the arrival of the virus. Some have gone as far as suggesting we could be back to normal by next spring.
Stock Markets Responding Well
With the news of the successful tests, world stock markets have soared. In the US, the Dow Jones Industrial Average, which had jumped 5.6% in opening trade, closed up about 3%.
In the case of the UK, the FTSE 100 added approximately £82bn to the value of its shares in the market’s best day since March – and one of the ten largest ever single-day gains for the index.
FTSE 100 jumps 5% after vaccine announcement
Property Forecasts Continue to Look Healthy
With the surprising resurgence of the property market post lockdown 1, large property groups have been upgrading their house price forecasts. Strutt and Parker are the latest groups to amend their previous forecasts.
The property consultants had previously predicted that UK house prices would fall by 1% in 2020. But following the incredible performance seen across the UK, they now expect price growth to remain flat in a worst-case scenario and grow by an incredible 5% in a best-case scenario.
Guy Robinson, head of residential agency at Strutt and Parker, said: “Over the summer the industry has witnessed what can only be described as a ‘mini-boom’, with unexpectedly high activity levels across the UK, driven by pent-up demand after the property market was shut down for nearly three months…
“Usually, the market naturally starts to slow down at this time of year but after the busiest summer that we can remember, there are a huge number of transactions in the pipeline for the coming weeks – so it is important that the market is kept moving from now until the spring when the Stamp Duty holiday is due to come to an end.”
We are strong believers in the UK property market and were not as surprised as some that it has been so resilient during the backdrop of Coronavirus. Adding the stamp duty holiday to this and the conditions have been good for a strong bounce back, which has proven to be the case.
Furthermore, with people’s perceptions changing of what they require from their homes, we expect that 2021 will prove equally fruitful. The vaccine looks closer than ever but the way we live our lives will be affected forever. Many businesses have flourished with the new working from home arrangements and will be wary of rushing back to expensive offices.
With additional freedom to work remotely, we will see extensive changes to the migration patterns in the UK. Larger cities in the north of England will undoubtedly benefit from this shift and will offer people an alternative to the notoriously expensive London living.
If you are considering venturing into property investment, then there is simply no better time. With prices expected to increase as much as 20% in the next 5 years, you can be sure that your investment will perform very well.
If you would like to find out how we can help you then get in touch today.
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