The vaccine roll-out in the UK is exceeding expectations and helping to prevent the spread and impact of COVID-19 on human lives. However, with one-third of UK adults already receiving their first dose of the vaccine, many are now considering the impact this will have on the rest of our lives as we look towards returning to everyday, normal life.
Statistics show that the COVID-19 vaccine roll-out is already having a positive impact on the economy, with the Office for Budget Responsibility predicting GDP will grow by 4% this year. They also expect that the economy will regain its pre-pandemic level in the second quarter of 2022, six months earlier than initially predicted last November.
We have already seen some industries grow during the pandemic and as we ease out of restrictions. Despite the pandemic, the property market started to boom towards the end of 2020, with house prices stimulated by the stamp duty holidays and more people looking to move to a home that better suits their needs.
However, once the government ends their grants, reliefs and support (such as furlough and the stamp duty holiday), we will need to consider how the economy will look. For example, the business rates holiday has been extended to the end of June, but after this, commercial tenants (or owners in the case of vacant properties) will need to pay these rates once again. And people who own multiple commercial properties and may not be able to let some or all due to lack of demand, this bill can be considerable.
Landlords of commercial properties are already putting them on auction with the hopes of future-proofing their portfolios rather than waiting to see if their tenants’ businesses will fare well when government support ends. With many companies closing due to the pandemic, commercial tenants recognise that there aren’t enough tenants to go around, and there is a considerable risk their properties could remain empty.
Regarding residential properties, the stamp duty holiday has been incredibly beneficial for homeowners looking to save some cash and property investors looking to expand their portfolio and secure buyers for properties. However, sale to completion timelines varies considerably, so there’s no guarantee that a property agreed now will be completed before the stamp duty holiday ends. As more people become vaccinated and feel safer returning to the world and having in-person viewings too, there could be more competition for properties, raising prices potentially from this summer onwards.
The vaccine will also allow many people to boot up their lives again. They are starting slowly with picnics, meals out with family and holidays potentially from summer to taking on more significant life choices like moving home and starting a family. After a year of living in unpredictable circumstances, many people will be ready for change, such as a new home or to move to an entirely new area (thanks to remote working!).
Demand for rental properties has already been evidenced through Arla Propertymark’s Private Rented Sector Report, which showed a surge in demand in January, rising to 81 registered prospective tenants per branch. This is up from 64 in December, and the demand is expected to grow throughout the year. Property investors and property developers looking at the buy-to-let market should consider the benefits of adding to their portfolio now, with the ability to raise rents as their properties are in demand.
It’s clear that as more people are vaccinated, and life returns to some form of normality that the residential property market will continue to grow. People want to move, find a better home suited to their needs or be closer to family. As a result, it’s predicted that residential properties will continue to be in demand, and the potential for house prices to rise is there too. On the commercial side of things, property investors should consider whether this side of the property market is ideal for 2021 and beyond or if their investments would be better suited elsewhere.