After all the drama of 2020, many of us were hoping that 2021 might be a calmer year – but January seems to have had other plans. What with new virus mutations, travel bans, floods, a national lockdown and an armed insurrection across the pond, it’s all been going on this month.
Among so much bad news, the property sector however has been doing better than most. Here are a few developments you might have missed.
The market remains open and thriving
England, Scotland and Wales all have aggressive national lockdown measures in place. But where many businesses in other sectors have been forced to shut down, moving house is considered an exemption to the ‘stay at home rules’ and estate agents remain busy. This is especially true for England, where the guidance is less cautious than in the devolved nations.
And people certainly seem to be making the most of the ability to go house-hunting. Industry bodies have suggested that numbers of viewings are well above the already high levels set in January 2020, and while this is partly due to the current stamp duty holiday, it perhaps also reflects a broader national desire to upscale prompted by the last year’s lockdowns.
Long periods spent working from home and home-schooling children have left many people keen to move to bigger properties, and there’s also been a lot of interest in more rural living. Whether these trends continue remains to be seen, but it may depend on the evolving economic situation and whether home-working remains popular once offices are able to open properly again.
Time is running out to complete before the Stamp Duty holiday ends
Announced in July of last year, the Stamp Duty holiday has provided a welcome boost for the property market. It’s due to end on 31 March, and while there’s some pressure on the chancellor to extend it, that seems fairly unlikely.
This means that anyone currently viewing properties is unlikely to complete a purchase before the deadline, and indeed many property purchases currently underway won’t either. Sellers and property professionals are going to find themselves put under a lot of pressure over the next couple of months as buyers try to chivvy along the famously glacial process of house sales, and you can expect a good deal of finger-pointing as 31 March passes by.
While the savings on Stamp Duty are considerable, they can also be a bit misleading. The ‘mini-boom’ in property sales since last May has seen demand considerably outstrip supply, driving prices up to the extent that in many areas it has cancelled out the Stamp Duty saving.
The market will probably slow down a bit when Stamp Duty goes back to normal levels, but property firms have noted that the sales boom actually started before the Stamp Duty holiday was announced last summer, and they remain hopeful for a strong year.
In-person viewings are still more popular than virtual ones
Estate agents have reported concerns that people are making the most of the lockdown exemption by travelling long distances for house viewings. It’s a tricky dilemma – on the one hand both property professionals and the government want to drive sales and keep the market moving, but on the other hand travelling between areas accelerates the spread of coronavirus and it is making some in the property sector understandably uncomfortable.
One solution is to encourage people towards virtual viewings, but according to a BBC article, agents are having trouble getting buy-in for these. One agent in Yorkshire reported that virtual viewing slots were going unused, while some house-hunters were travelling ‘hundreds of miles’ for in-person viewings. This is legal under the current rules, but it does perhaps demonstrate that where potential homes are concerned, people are still reluctant to conduct even a preliminary viewing online. Some estate agents, particularly in rural areas, have responded by ‘screening’ clients and turning down viewings for second homes during lockdown.
Eviction enforcement ban extended
For landlords and tenants, an important piece of news was that the ban on eviction enforcement has been extended until at least 21 February in England and 31 March in Scotland and Wales.
This ban was already in force over the Christmas period (and in tier three areas prior to that), but it has been extended to try and prevent people becoming homeless during the latest lockdown. The ban only affects enforcement (the actual act of sending bailiffs in when a court has agreed to this) rather than a full freeze on the eviction process as occurred last year. There are some exceptional circumstances in which evictions can still go ahead, notably in cases of domestic violence or anti-social behaviour.