On 22nd February, Prime Minister Boris Johnson announced the government’s four-part roadmap to loosening COVID-19 restrictions. How is this expected to impact the property market?
England’s third national lockdown started on 6th January. With the number of COVID-19 cases decreasing, Boris Johnson announced his four-part roadmap to lift the lockdown restrictions. The gap between each stage of the easing of restrictions will be at least five weeks. However, certain conditions must be met before proceeding to the next stage.
With the vaccination program in full swing, Boris has said all legal limits on social contact could be removed by 21st June. Firstly, lockdown restrictions will begin to ease on 8th March. This is when schools will open to all children and recreation in a public place will be allowed between two people.
In the second part of the first phase, outdoor gatherings of either two households or six people could be allowed from 29th March. Outdoor sports facilities will also open. This is also the point when people will be able to travel outside of their local area again.
In the second phase, non-essential retail and outdoor hospitality will be allowed to open. This will happen no earlier than 12th April. At this point, UK staycations will also be allowed in self-contained accommodation for members of the same household. With this recent announcement, searches and bookings for staycations in private accommodation will increase in the coming weeks. A staycation boom is looming, which will boost the short-term holiday let sector.
In the third phase, international travel will resume no earlier than 17th May. And even then, there could still be certain restrictions in place for travel abroad. This is also when hotels, hostels and bed and breakfasts will be able to reopen. During the four phase, all legal limits on social contact will be removed. This will happen no earlier than 21st June.
With COVID-19 restrictions easing soon, the short-term rental sector will see a boom this year. In most cases, a short-term holiday requires no human interaction, making it more attractive during the pandemic. Renting private accommodation will likely remain popular in the coming months and years. Because of this, short-term holiday lets could be a great way for landlords and investors to diversify their property investment portfolios.
The future of the property market weighs a lot on whether the stamp duty holiday will be extended. With the tax holiday set to end on 31st March, the government is announcing their decision whether to extend it or not at the Spring Budget.
During the third lockdown, COVID-19 restrictions have caused sellers to be more reluctant to list their properties. This has led to an imbalance in supply and demand in the UK property market, which has caused house prices to rise even more. With restrictions beginning to ease in the coming weeks, more sellers are likely to put their properties on the market. Additionally, the roadmap announcement will likely give more people confidence about the future.
Many property professionals have predicted the property market will be most impacted by unemployment levels. In the three months to December, the UK’s unemployment rose to 5.1%, according to the Office for National Statistics (ONS). This is a five-year high. However, the ONS has revealed there are some early signs of the labour market stabilising.
Additionally, data from CIPD, the human resources body, shows more than half of UK employers plan to hire new staff during the next three months. This is positive news for the UK’s economy and workforce, which could in turn impact the property market.
The property market has remained open and busy during the third country-wide lockdown. Estate and letting agents, removal firms and tradespeople have been allowed to keep working in people’s homes. Buyers and sellers have continued with their transactions as many hope to complete before the stamp duty holiday deadline.
Homebuyers and tenants have still been allowed to move. However, there has been a ban on evictions in the rental market. This was recently extended until at least 31st March. Landlords also still must provide a six-month notice period to tenants.
Building sites have also remained open, allowing the construction sector to keep moving. Housebuilding in particular is an important part of getting the UK’s economy back on track. The government plans to “build, build, build” to recovery. And the delivery of more housing can help meet the growing demand and help rectify the current housing shortage.
Further changes affecting the property sector, including stamp duty and capital gains tax, will likely come forward soon. Many are eagerly awaiting the Spring Budget on 3rd March, which is expected to include a few big announcements that could have a significant impact on the UK property market.
Source: Buy Association