How has the pandemic changed the property market
and who will it affect most?
Feedback from Estate Agents and Building Society's suggests that viewings and instructions (those putting their house on the market) have risen considerably in the two months since lockdown. Whether this increase in activity has come from the Chancellors generous scrapping of the Stamp Duty charge for homes under £ 500,000, or that lockdown has caused many to reconsider the area in which they live (and the house in which they live in), it is still to be seen if the robust nature of the market will continue.
This increase in activity also resulted in an increase in sale price, as according to the latest Halifax House Price Index the average price of a home was £241,604 in July, 1.7% higher than June's £237,834.
Halifax managing director Russell Galley said pent-up demand and a lack of available houses had combined to push up prices.
For First-Time Buyers (FTBs), this mini-boom has made the possibility of getting on the property ladder a little more difficult - despite the savings they may make on Stamp Duty.
However, there has been suggestion that this mini-boom may well be short lived with the economy going into recession, and the possibility of continued job losses, house prices may well fall in the near future.
This would all seem to be good news for FTBs, but that isn't necessarily so. Despite all of the above, when a recession hits, a mortgage provider will cover themselves financially against the potential of the lender not being able to repay, by asking for a larger deposit. Typically, a FTB will put 5%of the purchase value of the house down as a deposit. Although a property may now be cheaper - for example £ 200,000 from £ 210,00, and the deposit rises to 10% from 5%, the purchaser will now need to find an extra £9,500 for the deposit.
Lockdown has also had a damaging effect on young savers. The FTB is aged 25 - 34, and likely to be renting and in lower income jobs. Recent research points towards this demographic being the most likely to dip into any savings to get through the lockdown period - ultimately having a knock-on effect with their potential purchase.