Will the COVID-19 vaccine impact the UK property market? Winkworth agents share their thoughts
On 2 December 2020, UK regulators were the first in the world to approve the use of the much-anticipated Coronavirus vaccination by Pfizer/Biotech. Since then, two more vaccines (Moderna and the University of Oxford’s AstraZeneca vaccine) have also been approved for distribution in the UK, and the vaccine rollout has begun. A study by London School of Hygiene & Tropical Medicine has estimated that 2 million people will need to be vaccinated each week in order to prevent a third wave of the virus.
Despite the mammoth task ahead, the vaccine has provided a glimmer of hope worldwide as there now seems to be a viable end to the pandemic that has dominated our lives for over ten months. But after several lockdowns and a tumultuous past year for the UK property market, how will the COVID-19 vaccine impact the housing market in 2021?
There is no doubt that as the economy begins to recover from the effects of the pandemic, confidence in the housing market will increase. Matthew Hallett of Winkworth Salisbury comments, “The vaccine provides an opportunity for a bounce in the market, as does the post-Brexit landscape.” People who previously put off moving due to the uncertainty over Brexit, followed by Coronavirus, can finally take the plunge against a less tumultuous political backdrop.
The spring vaccine rollout also coincides with the end to the Stamp Duty Land Tax holiday on 31 March. While there has been somewhat of a rush to complete purchases before the deadline, Matthew believes that the positive impact of the vaccine will balance out the possible drop in demand when the holiday ends. “The Stamp Duty holiday has been a focus of the market since its announcement in July, but it does not necessarily represent the cliff edge previously predicted,” he says. “The feelgood arrival of spring and the road to immunity will soon have the world once again focusing upon the English property market (in particular, the London Monopoly board) as an inflation-proof investment.”
Alex Singh of Winkworth Crystal Palace agrees that the vaccine will help the end to Stamp Duty relief. “The immunisation of communities is likely to further stabilise markets and should support a smoother transition beyond the expiration of the Stamp Duty holiday.”
A return to cities...
As the pandemic progressed, a significant number of people living in big cities made a move to the suburbs or countryside in order to have more space. As working from home became more commonplace, the demand for extra bedrooms and gardens rose. However, Winkworth CEO Dominic Agace predicts that young professionals will return to London to focus on their careers. “London won't have lost its appeal once the vaccine rollout has allowed life to return to normal,” he says. “The appeal for the younger generations of all that London can offer will only have been enhanced by months of restrictions.”
Matthew agrees: “Escaping to the country has been a priority for city-dwellers during the pandemic. However, once the vaccine is implemented, the closed country pubs and struggling high streets of provincial towns offer little of London life. The city buzz will replace rural tranquility as a priority in a post-vaccine world.”
...But the country appeal remains
While many will still see the appeal of London, others have reassessed their priorities and realised just how much more you can get for your money outside of the capital. In addition, many companies, particularly smaller businesses, may decide to keep some of their workforce at home or introduce flexible working, meaning that home offices will remain a desirable factor. Alex Singh states: “People move for many reasons but at the moment it is notably lifestyle changes that are the biggest factor. This is unlikely to change throughout 2021.”
Dominic comments that it is not just those looking for more space that may stay away from the city. “We may also see an increase in downsizers joining the upsizers as the previous appeal of retirement amidst the city’s bright lights may well have lost its shine during a difficult year.”
A hopeful future
Above all, the UK’s vaccination plans provide hope for the future and will lift the nation’s mood. “We are all sick of the virus and this winter of discontent,” says Matthew. “Mass vaccination in the spring will take the country’s mood back towards the light, and as the seasons return towards the sun, so will the optimism of our economy and property market.” Alex agrees that as life returns to normal, the property market will strengthen: “There’s no doubt that we all face huge challenges ahead. However as more people get vaccinated, life will hopefully return to normal and this will have a positive impact on the property market.”