Where there is progress, you will find doomsayers shouting across the internet about end times. Many of these doomsayers warped articles and podcasts almost seem to be wishing for a property market crash to happen. So, let’s take a simplified look at the current UK property market.
- Is there going to be a crash? – No, we don’t see any signs of a crash.
- Are there going to be changes? – Yes, for the foreseeable future, there probably is no way to avoid a new normal for the property market, which might not be permanent, and will probably be more significant in some areas than others.
We need to consider incentives and circumstances.
Throughout 2020 and 2021 so far, as well as incentives such as Help to Buy, there have been a handful of new government and natural incentives has created a property market boom throughout the UK, the likes we have not seen since pre-2008. Such incentives were a stamp duty holidays, a furlough scheme, a lack of holiday season in 2020, to name a few.
Many of these new incentives are now coming to an end, however, there are two circumstances that seem to be going nowhere, which are a new normal of work, where many workplaces are considering keeping significant portions of their teams working from home, and a large amount of people continuing to re-evaluate their lives because of the pandemic, where “more space” seems to be a key demand.
These two circumstances will most likely way outlast the COVID19 pandemic.
Even though the government are hinting towards a push for people to return back to the office, if businesses have been making savings, whilst at the same time seeing increased productivity, as well as a better quality of life for their employees, many may not return to the office like pre-2020 no matter how hard government attempts t push, instead embracing a new combination of office and working from home, which seems like a much more likely outcome.
When the pandemic is over, the horrific memories of individual county lockdowns, and traffic light systems, will be deep routed in the minds of the public. Once we reach a point where detected cases (testing positive) are high and cases (hospitalisations) are low, meaning that the pandemic has just settled as an endemic similar to flu season, it’s to be expected that the media will now be hungry to hyper-focus on viruses moving forwards, just waiting for an opportunity of any hint of new virus to plaster across headlines.
It’s a very safe assumption then that this will be a factor for home hunting for the foreseeable future.
This demand of people moving out of crowded areas like cities in search of more open space, should keep the property market strong in countryside locations like Gloucestershire and The Cotswolds way past the pandemic, which means that no, there shouldn’t be a property market crash, even with schemes like the stamp duty holiday coming to an end. However, we do expect to see the market becoming a little cooler and more stable once the incentives are completely finished in September of 2021.
This doesn’t mean that there wont be issues.
An enormous 500,000 people are estimated to have relocated out of London throughout this pandemic so far. With so many people earning a city wage per month, now selling and moving to areas like Gloucestershire and The Cotswolds, where the local population earn a lot less wage per month, this could soon have a dramatic effect on the locals ability to buy and sell property, keeping prices inflated, where locals can be more easily outbid.
This disconnect of a new high earning demographic living within a demographic of lower earners is a big concern, and probably one of many reasons why the government will be keen to entice workers back into the office in any way that they can. This could take financial incentives, but does the country really have much left for more financial incentives?
This isn’t to say that people moving from cities to country will find doing so easy for very long either.
As demand drops in cities, naturally so will property prices, which is where, if national unemployment doesn’t become too much of an issue, we are more likely to see hints of a looming slump first. If people fleeing the city cannot sell, then not as many as we have been seeing will be able to buy in the countryside, but countryside local markets should still be strong. However, city people will still have higher wages, are likely to have healthier savings, as well as the possibility for a lucrative Let to Buy, so still could have the upper hand when buying within Gloucestershire and The Cotswolds …Only time will tell with this, which is a subject that needs to be monitored very closely.
Doomsayers and optimists across the internet are currently shouting “Yes” and “No” at each other as loud as possible to the question: Will there be a property market crash? However, it really isn’t so simple.
At Robinson David Estate Agents we feel that there will not be a crash, as current times are too complex for that. Figures from Zoopla and OnTheMarket are showing continued strength, especially in period country properties, where usually most of the strength is in housing estates, however, there will be changes and calming, with the potential to still stay just as strong for at least the next 12 to 24 months, where at the very worst we could eventually see a property market similar to 2019, which was still a healthy property market, just not as exciting and unpredictable.