Skip to content

Omicron Covid-19 Variant – Will it Affect the Property Market?

Want to hear about the best UK investment deals before anybody else? Sign up to our mailing list for information on lucrative investment opportunities, must-know offers, and more.

    Will Omicron Affect the UK Property Market?

    As new cases of the Omicron Covid-19 variant appear across the UK, tensions are running high.

    With further guidelines and restrictions looming before the festive period, and mandatory masks already being re-implemented in shops and on public transport, the UK public is becoming increasingly worried for the future.

    This is also the case with property investors, with economists and financial experts concerned about the future stability of the UK property market.

    But should you be worried? Will Omicron affect the property market? What if we have another lockdown?

    Secure 15% Deposit

    Only 15% deposit needed now, with nothing else to pay until February 2025 on luxury 2-bed apartments.

      covid-19, coronavirus outbreak, virus floating in a cellular environment , coronaviruses influenza background, viral disease epidemic, 3D rendering of virus, organism illustration,

      What is Omicron?

      Omicron, otherwise known as B.1.1.529, is a new strain of the Covid-19 virus that has been classified as a “variant of concern” by the World Health Organisation.

      How Many Cases of Omicron Are There in the UK?

      At the time of writing, there have been 22 confirmed cases of Omicron in the UK, according to a report in the Guardian.

      What Happened Last Time?

      To help illustrate the potential impact of Omicron on the UK property market, we’re going to look back at house prices and reports that appeared during each of the three reported waves of the Covid-19 pandemic.

      How Have We Defined a Covid Wave?

      Before we get into the data, it’s important to address how we are defining a Covid-19 wave.

      There is currently no official definition of what a Covid-19 “wave” is, and the data used may change depending on how you define it.

      At RWinvest, we are using the wave definition provided by The I, which defines a wave starting when reported cases rise over a seven-day period starting from below 2,000 national cases.

      With these parameters, we get three Covid waves, beginning in March 2020 and running until the present day, which is December 2021 at the time of writing.

      Limited Time Only

      Accrue interest on your deposited funds in our latest block in The Gateway.

      Image of 2020

      First Wave - March 2020 to May 2020

      The first wave of Covid-19, which we’ve defined as running from March 2020 to May 2020, led to the closure of the UK housing market.

      With Covid cases rising and the UK’s first national lockdown implemented on March 26th, the UK housing market was essentially forced to close overnight.

      Average UK House Prices During Covid Wave 1

      It wasn’t until May 13th that the market reopened.

      Despite this long closure period, the impact on house prices wasn’t considerable, with prices between March and April dropping by just -1.02%, before increasing in May by 0.52%.

      For context, during the same period, the stock market experienced its worst crash since 1987.

      This means that despite the Covid-19 pandemic causing housing transactions to plummet, house prices only dropped by £1,176 on average in the UK.

      With £10k Discount Applied

      Completed and fully furnished limited back to market properties in our best-selling, flagship development.

      Text 2021 aerial view

      Second Wave – July 2020 to April 2021

      As the country exited the UK’s first lockdown, there was a newfound appetite to move homes.

      With people trapped inside their homes for months, many started to re-evaluate what they wanted from their ideal home and decided to move out.

      This was compounded by the Stamp Duty Tax Holiday, implemented in July 2020, which allowed homebuyers to save up to £15,000 on taxes when buying a new home.

      These factors were mirrored in the housing market, which saw a huge rise in property prices over the year.

      Average UK House Prices During Covid Wave 2

      In fact, despite two national lockdowns occurring in this period (November 5th – December 2nd 2020, and January 6th to July 19th 2021) prices continued to rise to a peak of £253,508 in March – the first-time UK prices surpassed £250k on average.

      While there was a slight dip in April 2021 of -1.10%, the data shows that the UK housing market performed well during the pandemic and remained resilient.

      Request Virtual Tour

      Receive the virtual tour for this 2-bedroom apartment today.

        June text over city aerial view

        Third Wave – June 2021 to December 2021

        As most Covid-19 restrictions came to an end and the country returned to some form of normality, UK house prices experienced an unprecedented surge during the third wave of Covid.

        With tax savings still available from an extended stamp duty holiday, and phase 4 of the Covid-19 roadmap beginning on July 19th, housing market activity exploded.

        Average UK House Prices During Covid Wave 3

        As of July 2021, Rightmove noted a huge supply and demand imbalance, with the busiest ever first half of a year with 140,000 more sales agreed and 85,000 fewer listings than the long-term average.

        This persisted throughout 2021, with September 2021 seeing the hottest-ever competition to buy property, with buyer demand twice as high as pre-pandemic levels.

        In fact, Rightmove found that the price of new property coming to the market reached an all-time high of £338,462. This was at the same time as the Guardian reported that UK house prices were rising at the highest level since 2004.

        While property prices dropped in July after the main Stamp Duty Holiday ended, they soon recovered, reaching an all-time peak of £269,945, according to Land Registry data.

        This again shows the resilience of the housing market, with property constantly in demand by both homebuyers and investors.

        Buy-to-Let Investment Guide

        Want to become a successful buy-to-let investor? Get our free investment guide today for all the latest tips!

        Download Guide Guide - Buy to let investment guide

        Liverpool Investment Guide

        Invest in the UK's most popular property market. Check out the ultimate Liverpool Investment Guide 2024!

        Download Guide Guide Liverpool Investment Guide
        Students inside HMO Kitchen

        How Was the Student Property Investment Market Impacted by Covid-19?

        Despite many students opting to move back home during Covid-19, the student property investment market experienced a record-breaking year.

        A report from Savills found that £5.77 billion was spent on purpose-built student accommodation in 2020 – the highest-ever amount. This came alongside an 8.4% rise in UCAS applications for 2021.

        Savills states this is a sign that investors have remained confident in UK PBSA, with rent collection and occupancy rates in student accommodation resilient compared with other housing sectors.

        You can learn more about student property investment by reading our 2023 guide.

        What About the Rental Market?

        The initial impact on private landlords and the rental market during the Covid-19 pandemic wasn’t as optimistic as the impact on UK house prices.

        A report from the National Residential Landlords Association released in March 2021 found that 7% of tenants – around 840,000 – had built up arrears during Covid-19.

        Around 18% of these arrears were over £1,000 and around 11% of renters are now unemployed because of Covid-19.

        This naturally had an impact on landlords, with 60% of NRLA members losing income as a result of the pandemic, with 14% of landlords losing 20% of their income.

        We’re now in December 2021, however, and the rental market has recovered well.

        In April 2021, it took just 8.9 days to rent a property, down from 31.9 days in April 2019.

        Rental demand is so high, in fact, that Manchester has fewer than 500 available rental properties for the first-time ever.

        This has led to a surge in rental prices, with the UK average rent reaching an all-time high of £1,061 in September 2021, according to HomeLet.

        RWinvest Investment Finder

        Find the Perfect Investment for you.

          What's your investment objective?

          Minimum investment of £40,000

          What's your estimated budget?

          What areas are you interested in?

          What size property interests you?

          Your exclusive brochure is ready!

          Expert stairs at four screens with market data

          The Full Picture: March 2020 Onwards

          • Since March 2023, house prices have increased to an average of £285,009, a 4.1% increase compared to 2022.
          • Despite three national lockdowns in the UK, property prices have continued to hike, with predictions from Savills suggesting up to an 11.7% rise in North West house prices by 2027.
          • Rent reached an all-time high of £1,213 PCM in May 2023, according to HomeLet.
          Hand putting a coin in piggy bank. a pile of coins, business, investment, finance, and Money Saving for future concepts, save money.

          Should Investors Be Concerned in 2022 and Beyond?

          Looking at all the data, should investors be concerned about investing in property in 2022 with the rise of Omicron?

          While we don’t have a crystal ball to predict the future, the past data suggests that the UK housing market has learned to deal with Covid-19 and its lockdowns.

          This means that if Omicron did lead to further restrictions, including any future lockdowns, house prices and transactions should remain stable.

          At the moment, as of 2023, the UK has yet to face further lockdowns or restrictions.

          For more recent analysis, read our 2023 property market predictions guide.

          Join Our Mailing List

          Sign up to our mailing list today for information on the latest buy to let deals, new property launches, expert insights, and more.

            Get the Latest Investment News From RWinvest

            We hope you’ve enjoyed our guide to the potential impact of the Omicron Covid-19 variant on the UK housing market.

            If you want more content like this, be sure to check out our UK investment news page to learn more about the news stories in the UK housing market.

            Avatar photo
            Author

            Reece Pape

            Reece Pape is a property writer at RWinvest. Reece is passionate about keeping property investors updated on must-have information and housing market news, utilising the latest property market statistics and data.

            Disclaimer

            Contact Us

            Want to Get in Touch?

            Fill in the form to contact us today and a member of our award-winning property team will be in touch to help.

              I can honestly say they have put my mind at rest from day one answering all my questions I had , true professionals, I am not experienced in buying off plan or for a rental income but I have to say the process has been smooth from sales to Chloe in client care and now I’m handed over to the final stage for the site visits
              I feel very relaxed and happy with how amazing the team have been. I I can’t wait now to see the end built ! Thanks 🙏

              Kelly Webber

              Google Reviews Logo

              I have had the pleasure of experiencing exceptional customer service from RWinvest. Adam and Michelle were remarkable and were exceedingly supportive in facilitating the acquisition of two properties in Liverpool, at "The Gateway." Their guidance was instrumental in the purchase of the properties and I express my utmost satisfaction with their assistance, and I am inclined to not only endorse but also consider any property advertised by RWinvest.

              Narendra Rai

              Google Reviews Logo

              I am very happy and satisfied with RWinvest. Their team was always responsive, supportive and friendly throughout my investment process. Thomas from RWinvest team was especially very supportive and he made sure that I have all the necessary information at the right time. He helped me with all my queries, and helped me to complete my investment process smoothly and with peace of mind.

              Babak

              Arrow left
              Arrow right
              UK