It’s would be a massive understatement to say that March has been a strange month – not just for the UK property market, but the world as a whole. Coronavirus has dominated the headlines, however there are plenty of more key points to come out of March 2020:
Towards the beginning of the month the government released their 2020 budget, making numerous promises towards the UK housing market. £1.1 billion from the housing infrastructure fund is set to be allocated to build around 70,000 homes in high demand area; The Affordable Homes Programme is being given a £12.2 billion extension and will run until 2025 now instead of the end of next year and the chancellor introduced a Grenfell building safety fund of just under £1 billion that will be used to remove any cladding from residential buildings taller than 18 metres.
Possibly the biggest revelation from the 2020 budget was the announcement of the introduction of the stamp duty surcharge. There will be a two percent stamp duty surcharge on the purchase of UK investment properties by non-resident overseas buyers, coming into action in April 2021. The introduction of the surcharge is expected to urge many foreign buyers and British expats to act quickly and invest in UK property before it is introduced next year.
House prices rise and affordability
The beginning of the month also saw a massive increase in house prices, building on from an impressive start to the year. According to a report from Home.co.uk, many areas across the nation continued to recover from the numerous years of uncertainty in recent times and now look set for considerable growth in both the short and long term.
The mix-adjusted average home price for England and Wales has risen to 1.8% year-on-year; the highest such growth seen for two years. The North West and Wales are currently the UK’s top performing regions, with both experiencing an annual rise of 4.3%.
Despite house prices continuing to increase, data from the Office for National Statistics has found that low rates in the housing market have improved the affordability of homes in the UK. According to the data, full-time employees in England used to spend around eight times their workplace-base annual earnings on buying a home, however that figure now sits at around 7.8.
Undoubtedly, the most talked about topic throughout the month has been the coronavirus, otherwise known has COVID-19. Coronavirus has spread all around the globe, causing leading markets to plummet, people to self-isolate and schools and non-essential stores to close.
Despite a number of the world’s leading markets falling dramatically throughout these unprecedented times, the UK property market has remained stable and continues to offer a worthwhile investment.
Promises have been put into place to support those who both own a property or rent. For homeowners, those who develop financial problems during the coronavirus crisis will be granted a mortgage payment holiday of up to three months. Their monthly payment will change to zero, although interest will accrue over the period.
In a move to protect an estimated 20m renters, emergency legislations have been put in place to prevent social or private renters being evicted from their homes during the crisis. Landlords will be barred from launching eviction proceedings for a period of at least three months.
The government has also increased housing benefit and universal credit as a result of the outbreak. This move will allow the Local Housing Allowance to be able to cover at least 30% of market rents for those who have been affected financially by the outbreak.
The government are also pumping £7 billion into welfare to protect people’s incomes, with many jobs currently being put at risk. In addition to this, universal credit is being increased by £1,000 a year, with both the standard allowance for a single person and for couples being raised for the next 12 months.
It’s safe to say it’s been a tumultuous month for the UK property market, filled with change and uncertainty. These are unprecedented times for us all, but the UK housing market looks to be staying strong and is sure to flourish even more once things have settled down.
The most important thing at this moment in time is people’s safety. China is finally seeing an improvement in the outbreak, with Wuhan – the city of origin – set to come out of lockdown at the beginning of April. There seems to be light at the end of the tunnel, and day-to-day lives can go back to normal, markets will settle, and the world will continue as it was.