The lockdowns had to be enforced to contain the spread of Covid-19. Surprisingly, though, with so many limitations caused by such lockdowns in all sectors, as far as the Real Estate and Property Market was concerned, there were some positives as well – not just in rural and city areas but in the suburbs also. Most agents, including the Bicester estate agents, will concur with this.
Working online from home: One of the major impacts of the lockdown was that many offices had to close, resorting to employees working online from residences. This caused people to have a re-think about their accommodation. Making the home comfortable became their priority, with having to live and work in the same house.
In addition, many people wanted more space, including an office and outdoor space for a garden or relaxation. This resulted in many moving out from cramped city areas to more spacious suburban locations, which was a plus point for the property market.
SDLT holiday: The stamp duty land tax holiday was an incentive for prospective buyers to take advantage of the benefits. The real estate sector saw a boom at this time, despite the lockdown. With the holiday being extended till the end of June 2021, with a tapering programme until the end of September 2021, this trend will continue.
Innovative technology: Although the lockdown impeded on-site viewing of properties, virtual viewings were made possible so that a prospective buyer could view every bit of the property before making a decision. It enabled even foreign investors to transact business during the lockdown.
The Real Estate sector has become dependent on expanding digital technology, which includes Proptech, AI (Artificial Intelligence), IoT (Internet of Things) and ML (Machine Learning). This wide sphere of facilities is available to buyers, sellers, landlords, lenders and agents and makes transactions easier and more transparent.
Price negotiation: This was made possible during the lockdown when some sellers were either struggling to or forced to sell a property and were willing to negotiate on prices.
Mortgages: Even though the mortgage market was hit by the lockdown, with lenders wary and withdrawing mortgage offers, remortgaging seemed to remain stable. Switching the existing mortgage to a new deal and taking advantage of low rates offered by lenders due to the Bank of England’s cut in base rate was a benefit to some astute buyers.
Demand against Supply: The demand for property continues to exceed the supply. During the lockdown, people had time to reassess their housing priorities. As a result, the demand for larger, more spacious accommodation rose and, with it, so did the prices.
However, the construction industry was badly impacted by the lockdown. As a result, there was a fall in this sector, which only raised the demand. It has now recovered, and this revival will lead to at least some of the supply towards the demand.
Rentals: Travel restrictions caused a fall in student accommodation, especially with international students. Many tenants stopped paying rent after the announcement that tenants could not be evicted during the lockdown.
Landlords were hit, and some had to agree to relaxations in rentals – such as a shift from quarterly to monthly payment dates, a temporary reduction in rent, payment in arrears rather than in advance, etc.
Yet, they still had commitments to meet. However, with hopeful return to near-normal routine and short-let properties coming on the market, rentals even in city areas have been on the rise.
Retail: The sector hardest hit by the lockdown was the “non-essential” retailer. It caused them to literally shut down. With the already present competition from e-com, online shopping, and low consumer spending, this sector bore most of the brunt of the lockdown in the property market.
However, now that the lockdowns have been lifted, the retail market may be able to start growing again. Still, structural changes will need to be made. With people still trying not to travel too far, grocery, corner shops, boutiques and convenience stores in the neighbourhood will progress.
So will restaurants and entertainment centres. Discounters and value retailers offering home deliveries will continue to rise.
Unexpected savings: Something “out of the blue” was the money that was saved during the lockdown – with entertainment, relaxation and sports venues, restaurants, shops etc., being closed and such expenses curtailed. Some savvy savers made the wise decision to invest this money in the property market.
Sustainability: The lockdown caused property investors to look at the sustainability of buildings, with the ESG factors (Environmental, Social and Governance) of prime importance. Health and hygiene are now a priority. Compliance with sustainability regulations and renewable energy technologies, bringing a property to a net-zero carbon status will safeguard the property and lead to a hike in the property value.
Conclusion: The “bricks and mortar” sector has stood the test of time, and the Real Estate market remains one of the most stable for investments. Despite the hindrances to this sector during the lockdowns, and perhaps from the lessons learned during such lockdowns, the property market remains buoyant.
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