Property Prices Post Pandemic

The UK, most especially Cardiff, saw a high rise in the demand for houses during the pandemic. This is linked with the high rate of workers having to take on remote jobs and needing bigger home spaces to be comfortable. However, as things are beginning to get back to normal, this demand has dwindled but the prices of properties may remain high for a while.

Property transactions are on the low. This observation traces as far back as March 2021. Data obtained from the HM Revenue & Customs data shows that property transactions have reduced by over 71,000.

From simple economics, it can be surmised that as supply keeps reducing, prices may also start increasing steeply (if it hasn't already).

Analysts in the UK property market predicted a downturn in the housing market as the world takes a "back to normal" curve. If you're a seasoned investor or a first-time buyer with limited funds, now is the right time to buy that property. When the prices start to rise again, the possibility of you ever owning a property will begin to seem out of reach.

Real Estate In The UK in 2020

The COVID-19 pandemic disrupted a lot of sectors and played a huge role in destabilizing the UK economy. The real estate industry was all smiling. UK residents moved houses in large numbers, with most of them choosing to move away from the glamorous areas to more quiet rural areas.

The market observed a surreal rise in numbers of mortgage approvals, thanks to the many unprecedented stimulus packages received by residents.

At the end second quarter of 2020, the average price of properties in the UK was around £238,000, the average price of properties went as high as £253,000 by the end of the fourth quarter.

From the records the last time this sort of growth was observed was in 2004. Official records show that since 2004, the rate of property challenges has been on the rise, however, the spike experienced during the pandemic was unprecedented.

The pandemic caused a great change in personal priorities with most people clamouring to stay atop of the looming financial woes by retaining remote jobs. This and more influenced the market during the pandemic. Need I mention the stamp duty tax saving policy that was put in place.

Post-Pandemic Property Sales

The property market has remained resilient, although not as resilient as it was at the onset of the pandemic.

Now, the economy appears challenging, as the government is still putting in place better and improved policies to enable the UK to regain the ground lost during the pandemic.

The predicted slowdown in the real estate market has started and may last for a few months.

For now, the decline in supply, as well as demand, compared to the peak of the pandemic has been moderate, however, the values may go lower if the economy does not pick up as soon as possible—especially the employment rate.

Prices of Properties In Different Areas

The annual growth rate of property prices in the UK is estimated to be 10.2% higher than in the pre-COVID 19 eras.

As expected, the highest price rises have been observed around the South East of England and outside of London. The biggest increases in Wales can be found in Cardiff.

A little research, on property sales search sites like Rightmove, will also show that Cornwall overtook London as the most popular search area for property investors.

One common interest that most buyers have is the need for space. There seems to be a want for bigger homes with acreage or at least gardens. Bigger rooms to live in, with balconies that open up to fresh air from the close coast or countryside.

The city areas appear less attractive to buyers, most of them just want a family home to stay with their families and enjoy the peace of the rural areas. COVID helped people reassess their family lives.

Unfortunately, these sorts of properties are now in short supply.

On the other hand, as people are moving out of apartments in the city areas, fresh faces are coming in.

Due to this, apartment prices are also higher than they were a year ago. Meanwhile, the rate of growth is lesser than that of spacious family houses.

The majority of the covid restrictions put in place over the last year have been lifted. Buyers are taking the chance to move into the bustling and exciting cities in the UK. So, properties are still selling in these areas at a significant rate.

Implications Of The Rising Property Prices

If the Finance minister decides to boost the economy by using the housing market, post-Brexit exports would be affected. This has happened several times in the past when previous finance ministers attempted the same.

The rising property prices post-pandemic is set to increase profitably for actors in the construction and real estate sector. Manufacturers would make wage increases to retain the best talents in the field. These wage increases will necessarily not be caused by productivity gains.

Simply put, as the prices of properties continue to increase, so will the shares of construction workers in the workforce.

The price boom may also position the UK at the right spot to bring in more foreign investors. This would work out for all residents as the domestic currency—pound sterling—would become more stabilized and exports may become expensive. It would be a better replay of the events that occurred in the early 2000s.

Conclusion

According to the Bank of England, house prices in the UK have seen spectacular growth since 1980. Compared to other advanced economies, the housing market in the UK properly stands out.