Covid-19 and the UK Property Market

Covid-19 and the UK Property Market
Amy Jackson
Amy Jackson
Property Editor
4 Min Read

The UK has faced a lot of uncertainty over the past few years, with Brexit and the 2019 general election causing many to question the strength of property investment.

Now that the UK and EU have agreed on a post-Brexit deal, and the threat of a no-deal Brexit is gone, property prices after Brexit appear more promising.

Despite this newfound certainty on the Brexit front, some are still concerned about whether they should invest or purchase property during the ongoing Covid-19 pandemic.

Coronavirus, otherwise known as Covid-19, first hit the UK at the end of January 2020 when two cases were confirmed.

As numbers had grown, certain aspects of the finance world were affected.

The global stock market, for instance, experienced a plunge on 12th March, which led many to pull out of their stocks and shares investments and look for alternative places to put their money during this time.

Many experts predicted that the Covid-19 pandemic would have disastrous consequences for the UK housing market.

Fast forward to 2021, and the housing market is currently booming following record-breaking rises throughout 2020.

In our updated blog post, we look at how the UK property market has performed throughout the Covid-19 pandemic and outline what the third national lockdown could mean for the housing market in 2021.

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Property Market Covid-19 Property Market Covid-19

Property Investment in Past Times of Uncertainty

In past times of uncertainty, the UK property market has remained robust and continued to grow and thrive.

Brexit is a prime example of this.

Following the Brexit vote in 2016, house prices in the UK had risen by £2,623 by October in the same year.

Then, in just a year, UK property prices had increased by 4.5% by October 2017.

This was a different outcome than many had anticipated following the Brexit vote.

The UK market has only continued to grow stronger as time has passed.

After Boris Johnson was elected as PM in December 2019, the UK saw what experts had coined the ‘Boris Bounce.’

Due to a boost in market certainty, the UK property market experienced a lot of growth.

By January, for instance, average house prices in the UK had leaped by 2.3% since 12th December.

The direction that the UK property market had taken during this time was unexpected by many people in the industry.

Because of this, many investors had unfortunately missed out on the chance to make a solid and lucrative investment.

Another relevant example is the swine flu outbreak, which hit the UK in April 2009.

During this time, house prices in the UK continued to rise by 10.1% from March 2009 to March 2010, highlighting the UK market’s resilience.

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What’s Happened to the Property Market During Covid-19 So Far?

To understand how the UK housing market has been affected by the coronavirus pandemic so far, let’s look at some of the key changes and events of each season in 2020.

Spring/Summer

The Spring of 2020 marked the beginning of the Covid-19 pandemic and the first nationwide UK lockdown.

On the 23rd March, Boris Johnson instructed the nation to stay at home to tackle rising coronavirus cases and deaths in the UK.

This meant that a lot of businesses had to close while the majority of office workers began working from their homes.

Due to a temporary ‘freeze’ on property viewings, property market activity reached a standstill, and estate agents Zoopla reported a 40% drop in demand by the end of March.

By April, however, Nationwide had reported a 0.7% rise in property prices, and 2.4% year on year growth was recorded. Buyer demand also increased by 88% in May.

The Summer of 2020 saw a massive boost in levels of demand for rental property, with demand for lettings reportedly up by 22%.

Many renters were looking for accommodation that was better suited to lockdown life, which meant there was a boost in demand for apartments with balconies or shared gardens/terrace areas, and high-speed internet to facilitate remote working.

Not only was rental accommodation highly in demand from tenants, but the summer saw a surge in numbers of homeowners and investors looking to buy property.

After the stamp duty holiday was announced in July, the UK property market saw high demand from those looking to take advantage of tax savings.

At RWinvest, we saw a lot of interest and investment activity for our properties throughout 2020, which was in part thanks to the fantastic deals and discounts offered by developers, such as below-market prices and assured rental yields for several years.

Between July and August, UK property prices increased by 1.4%, with a 5% average year on year growth by September.

Aerial view of Manchester Aerial view of Manchester

Autumn/Winter

The Autumn of 2020 was perhaps the most monumental period for the UK housing market during the Covid-19 pandemic.

By October, annual house price growth had grown by 5.8%, which was the highest increase seen since January 2015.

A month-on-month property price increase of 0.8% was also recorded in October. Savills have since updated their popular residential market forecast.

They estimated that the UK would see house price growth of 21.1% by 2025, while the North West region would see the highest increase in property prices with a 28.8% rise.

In November, annual UK house prices had grown in value by 6.5% – the largest year on year rise in almost six years.

In December 2020, news of an approved Covid-19 vaccine was officially announced – the first step towards hopefully ending the pandemic.

House prices also continued to rise in December 2020, with the average UK property price being 0.8% higher than it was in November.

FAQ's About Covid-19 and the UK Property Market

Different factors led to the UK property market performing so well throughout the coronavirus pandemic in 2020.

From an investment perspective, many investors chose to buy property during this time as they recognised the potential behind investing when prices are low and understood that house prices would soon rise to new levels.

Developers began offering enticing deals for their properties soon after the beginning of the pandemic, and savvy investors made the most of this.

With average property prices set to rise by as much as 28.8% in the North West region, there is tremendous capital growth to be made when buying property in the best places to invest in the UK.

The stamp duty holiday, which launched in July, is undoubtedly another massive factor in the housing market boom of 2020, allowing investors to save as much as £15,000 in stamp duty tax.

Another reason that housing market activity has stayed strong during Covid-19 is the high demand for rental accommodation, which has opened up more opportunities to buy to let investors.

On the 4th January 2021, the UK entered its third national lockdown.

Unlike during the first lockdown in March 2020, the property market remains fully open during the third UK lockdown, which is good news for the housing market.

Housing market activity can resume as normal during this period.

With the stamp duty holiday’s reduced rates still ongoing until September 2021, it’s likely that demand for property will continue to be high and house prices will continue growing.

Property viewings are still permitted during the 2021 lockdown, but buyers must adhere to certain guidelines.

This includes maintaining social distancing at all times and ensuring there are no more than two households inside a property at any one time.

Buyers are not permitted to visit property viewings with people outside of their household or support bubble.

The use of face masks is also encouraged during in-person viewings.

For those interested in buying property with RWinvest but are not comfortable attending an in-person property viewing, virtual viewings are still available.

Yes, there are still plenty of properties on the market in the UK.

Like us at RWinvest, most companies are still up and running during this time but keeping our staff safe by enforcing remote working and Covid-secure policies.

We have a range of excellent investment properties listed on our website, which we would be happy to discuss with those interested.

Our latest investment opportunity, ELEMENT – The Quarter, is a unique eco property that’s priced from just £74,950 and offers assured rental yields of 8% for one year.

Yes, offers on properties can still be accepted during this time.

If you would like to make an offer on a property, our team of property consultants, client care professionals, and post-sales managers can assist you in any way possible and help take you from the offer to the exchange stage of your purchase.

UK banks are offering those with a residential or buy to let mortgage the chance to take a ‘repayment holiday’ for up to three months.

This means that if you’re struggling to meet mortgage repayments due to financial strain brought on by the coronavirus pandemic, you’re able to take a break from paying your usual mortgage costs.

During this time, you will continue being charged interest on your mortgage, which will be applied to your mortgage balance monthly.

This means that when the mortgage break is over, you may be paying more than you did previously.

Over 2020, there have been some significant changes to mortgages.

Most banks are now looking for a deposit of at least 15% for residential mortgages, with very few mortgage deals available for those with a 5% or 10% deposit.

Those looking to secure a buy to let mortgage for their investment are advised to put down a minimum deposit of 40% if they can due to high demand.

Why Did the UK Property Market Perform Well During Covid-19 Pandemic?

Different factors led to the UK property market performing so well throughout the coronavirus pandemic in 2020.

From an investment perspective, many investors chose to buy property during this time as they recognised the potential behind investing when prices are low and understood that house prices would soon rise to new levels.

Developers began offering enticing deals for their properties soon after the beginning of the pandemic, and savvy investors made the most of this.

With average property prices set to rise by as much as 28.8% in the North West region, there is tremendous capital growth to be made when buying property in the best places to invest in the UK.

The stamp duty holiday, which launched in July, is undoubtedly another massive factor in the housing market boom of 2020, allowing investors to save as much as £15,000 in stamp duty tax.

Another reason that housing market activity has stayed strong during Covid-19 is the high demand for rental accommodation, which has opened up more opportunities to buy to let investors.

What Does the Third National Lockdown Mean for the Property Market?

On the 4th January 2021, the UK entered its third national lockdown.

Unlike during the first lockdown in March 2020, the property market remains fully open during the third UK lockdown, which is good news for the housing market.

Housing market activity can resume as normal during this period.

With the stamp duty holiday’s reduced rates still ongoing until September 2021, it’s likely that demand for property will continue to be high and house prices will continue growing.

Are Viewings Still Allowed?

Property viewings are still permitted during the 2021 lockdown, but buyers must adhere to certain guidelines.

This includes maintaining social distancing at all times and ensuring there are no more than two households inside a property at any one time.

Buyers are not permitted to visit property viewings with people outside of their household or support bubble.

The use of face masks is also encouraged during in-person viewings.

For those interested in buying property with RWinvest but are not comfortable attending an in-person property viewing, virtual viewings are still available.

Are There Properties on the Market?

Yes, there are still plenty of properties on the market in the UK.

Like us at RWinvest, most companies are still up and running during this time but keeping our staff safe by enforcing remote working and Covid-secure policies.

We have a range of excellent investment properties listed on our website, which we would be happy to discuss with those interested.

Our latest investment opportunity, ELEMENT – The Quarter, is a unique eco property that’s priced from just £74,950 and offers assured rental yields of 8% for one year.

Can Offers on Properties Still Be Accepted?

Yes, offers on properties can still be accepted during this time.

If you would like to make an offer on a property, our team of property consultants, client care professionals, and post-sales managers can assist you in any way possible and help take you from the offer to the exchange stage of your purchase.

How Does Coronavirus Affect My Mortgage?

UK banks are offering those with a residential or buy to let mortgage the chance to take a ‘repayment holiday’ for up to three months.

This means that if you’re struggling to meet mortgage repayments due to financial strain brought on by the coronavirus pandemic, you’re able to take a break from paying your usual mortgage costs.

During this time, you will continue being charged interest on your mortgage, which will be applied to your mortgage balance monthly.

This means that when the mortgage break is over, you may be paying more than you did previously.

Over 2020, there have been some significant changes to mortgages.

Most banks are now looking for a deposit of at least 15% for residential mortgages, with very few mortgage deals available for those with a 5% or 10% deposit.

Those looking to secure a buy to let mortgage for their investment are advised to put down a minimum deposit of 40% if they can due to high demand.

If you have any current concerns about the UK property market and our property investment opportunities here at RWinvest, please get in touch.

Our helpful sales consultants are happy to advise you on our current investment options and help you make the best venture at this time.

For further insight into whether or not you should invest during this time, take a look at our latest article – ‘Is now a good time to invest in the UK property market?’, or if you would like to find out about the effect on the rental market after Covid-19, take a look at our latest blog.

For a more up to date look at current Covid-19 news, read our blog about the Omicron variant and its possible effect on the property market.

Amy Jackson
Amy Jackson
Property Editor

Amy Jackson is the property editor at RWinvest. Amy has over three years of experience working in the property content sector and has a keen eye for finding the latest news, statistics, and must-have property investment information. 

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