Featured in Property Investor Today
It
would be an understatement to say that the Covid-19 pandemic has caused
upheaval to sectors, industries and businesses around the world.
Property
is one such example of this. The housing market has experienced a tumultuous
year, with responses to the uncertainty caused by the pandemic and the
lockdowns it has provoked meaning that the landscape of the sector, and the way
in which people buy, sell and rent property has changed
drastically.
The
first national lockdown last spring saw the sector slow to an effective halt,
as property professionals were forced to work from home and potential buyers
and tenants held off from entering the market. ‘Stay at home’ orders meant that
agents were unable to conduct their usual activities in terms of marketing and
managing property.
However,
lockdowns also meant that people’s behaviour shifted. Many people who were
planning to move or buy new property before the outbreak paused their plans,
and homeowners rushed to sell property quickly in hopes of making their
financial assets more accessible during the period of economic uncertainty.
After
the UK entered its first lockdown at the end of March 2020, both rental and
buying demand data showed an immediate drop off. According to data collected by
Rightmove, rental interest fell by 42%, and sales offers dropped by 70% in April according to Zoopla, as people
presumably opted to stay put and wait out the storm.
Equally,
many landlords looking to sell their properties were also restricted, with the
UK government placing bans on placing tenanted properties on the market for the
duration of the lockdown order.
But,
as restrictions were eased the following summer, the sector experienced its
first boom. New buyers and tenants flooded the market, as people rushed to
continue with their life plans as the world returned to a partial normality.
During the summer months, Rightmove suggested the number of properties that
were “sold, subject to contract” were up by 125% compared to the same period the year
before.
Increased
demand for space
In
September 2020, the bank Santander released data showing that more people than ever were
applying for loans on the basis that they wanted to extend their space at home.
Equally, one of the most integral deciding factors for people buying and
upgrading houses during this period was space.
Many
buyers searched for bigger properties that included larger living areas, more
bedrooms and more outdoor space. These desires were presumably based on the
fact that people had spent an unprecedented period of time in smaller, less
private homes, such as apartments and suburban houses during the months they
were locked down.
Notably,
across the Atlantic, the story was much the same. The US housing market, which
was hit hard by the first set of lockdown restrictions in April, experienced a
revival in certain areas once restrictions were lifted in the summer.
Real
estate professionals indicated that space was a key deciding factor in
buyers’ needs in 2020, with Rose Quint, a researcher from the US National
Association of Home Builders noting a steady trend for ‘upscaling’ within the
upper-middle to top tiers of the US housing market.
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