Amid the disruptions caused by the pandemic, many events like holidays, sports and even weddings had to be postponed due to people being unable to travel both within the domestic and international domains. These travel restrictions have also affected the UK’s property market, especially in cities like London and others. Now, with the hopeful return to normalcy, real estate agents, especially where there are detached houses for sale in city areas, like the estate agents in Buckingham, are eagerly looking forward to a new start in the London property market.
Domestic travel: The government’s policy to end the lockdown at the end of March and resume domestic travel from early April has brought hope to those involved in the property market. Not only will offices reopen, but with the subsequent reopening of shops, restaurants, hotels and entertainment venues, more people will want or need to travel to London and the city areas. Some people, returning to office work in cities, may decide on living close by instead of the suburbs. Many of those who chose to move to more rural areas during the pandemic miss city life and looking forward to moving back. This may see an increase in rentals in the city and home sales, which could have an impact on prices too.
International travel: The restrictions on international travel from the UK still exist, and the travel ban will continue for the time being, except for people travelling for a valid reason. Only this will be acceptable for international travel. However, for travel within the UK, a quarantine period of 10 days is required, and two coronavirus tests must be taken while in quarantine. If travelling from a country on the travel ban red list ten days before arrival, the quarantine will need to be in a government approved hotel.
Foreign investment: The SDLT holiday applies to foreign investors as well, and the extension till the end of June 2021, phasing out till the end of September, gives them more leeway. Despite the tax surcharge for foreign investors with effect from 12 April 2021, which may sway the decisions of some, as there is a growing interest in UK properties. Physical viewing of property has remained a preference, and travel restrictions so far have allowed only virtual viewings. And with the lifting of the travel ban into the UK (with provisions, of course, many investors from the Middle East and other countries who are keenly interested in investment in London and other UK properties will be able to visit and have physical viewings. This should increase house sales and help “repair” the damage to home prices as well.
Space: With the lockdowns causing a pent up demand for more spacious accommodation, detached houses in the city areas and close suburbs could see a surge in sales as travel restrictions lift and more people return to London and other cities. This will affect house prices as well.
Rentals: Schools and universities have reopened, and with travel restrictions for inward travel relaxed, the rental market in London and other cities could see a boom. While needing to look at larger accommodation to suit the current trend, property investors should also keep an eye open for the rental portfolio. Short-term domestic holidays are soon to be allowed, with overnight stays and self -catering accommodation. This may also impact the private accommodation rentals in cities and, consequently, property prices as well.
Demand against Supply: The supply has always been high against the demand in the property market. With travel bans lifting, the demand is likely to continue spiralling against the supply. This, in turn, will affect the pricing of houses, especially in the PCL (Prime Central London) area.
Immigrant requirements: With the points-based system for migrants to the UK, employment security is one of the requirements. In some of the hospitality areas, migrants form a large part of the service sector. Their return to these employment areas in London and other cities could have a result on rentals and apartment prices. However, it may take some time for the hospitality industry to revive and afford the service they offered in pre-pandemic times.
Conclusion: Travel restrictions did injure London home prices. However, with an optimistic look at a bright future, with the improving economy, the ongoing vaccine rollout programme and the end of lockdowns, it is likely that there may be a boomerang effect, with the return to city life increasing. For investors, it is wise to take the expertise of an experienced real estate agent, who will be able to guide you in getting the best offer possible. Conditions differ in various parts of London, and an understanding of the market is essential. Although the future is not predictable, it has a positive outlook for the London property market.