Are house prices going to drop when furlough ends?
Homeowners have been worried about house prices since the start of the pandemic, and so far there has been support in place to prevent this. However, furlough is due to end in September, which is expected to have a knock-on effect on house prices. With unemployment also expected to increase, house prices may suffer as less people will be in a position to buy.
Homeowners have been on edge for months now, waiting to see the damage that could be done to their house value as the after-effects of the lockdown start to set in. The property market was stopped for several weeks at the start of the pandemic, and this pause had many of us concerned that property prices would fall dramatically. So far, with the support of the stamp duty holiday and the property market able to continue throughout the tier system and the second lockdown, prices haven’t been too heavily affected. However, with the furlough scheme due to end in a few months time, is this set to change?
When does furlough end?
The furlough scheme was originally due to end in October 2020, but with so many of the restrictions still needing to be in place and preventing a huge amount of people going back to work, it was extended. The latest from the Government is that the furlough scheme will to begin phasing out from July 1st and end on September 30th 2021. Some are hopeful that the scheme could be extended once more, but it seems unlikely, given the Government has now announced that there will need to be some sort of tax increase to compensate for the money that has been spent throughout the coronavirus pandemic to support the country.
The end of the furlough scheme is expected to bring a huge wave of unemployment, with businesses that are either unable to reopen or no longer have the demand for a full team of staff, and with unemployment already high this is a big worry. Along with this, the full stamp duty holiday will finish at the end of June and will then be tapered until the end of September in order to smooth the transition back to the original rates. This is sure to slow down the property market. Factoring these two events, as well as the country having entered a recession, the expectation is for the property market to suffer, and for house prices to drop.
How dramatically will house prices drop?
Unfortunately no one has a crystal ball and it’s impossible to predict how much house prices will suffer. With the unemployment rates as they are, and expected to rise later in the year, coupled with the stamp duty holiday ending that has been saving homebuyers as much as £15,000, it’s inevitable that we’ll see a drop in house price as there will be decreased demand. There is also likely to be a tax increase, which will further discourage people from buying property.
Buying and selling a house at any time is a huge financial commitment, and with the problems coming in September 2021, there will no doubt be less people looking to make that sort of financial commitment. Instead, homeowners that were looking to sell later in the year are trying to sell now, to avoid the difficulties ahead.
Can I still sell now to make the most of stamp duty?
Some homeowners wanting to sell are worried that they’ve left it too late to move to a new house and benefit from the stamp duty holiday, but there are still options for them. While selling on the open market can take over 6 months which would push you past the stamp duty holiday end, you can sell with Olivia Rose Estates, and achieve a sale in as little as 7 days. This would allow you to benefit from the stamp duty holiday before it ends in September.
Are house viewings still allowed?
At the start of the pandemic when the property market came to a halt, no property viewings were able to take place. To contend with this, virtual viewings came into play, allowing sellers to upload video footage of their properties for potential buyers to watch. These meant that while buyers couldn’t enter a house, they could get a feel for the property and then know if they were willing to go forward in the process when the market was then reopened.
After the lockdown ended, property viewings were able to go ahead again, and they still are now, despite the limited restrictions still in place. However, virtual viewings are still a huge part of property listings and are being used by a lot of sellers to limit the number of physical viewings they have. Selling homeowners will often have a lot of viewings that don’t evolve into offers, so to reduce the number of people coming into contact with them, virtual viewings can be hosted first to ensure that the buyer is interested in progressing.
Should I sell now?
If you were considering selling your house in 2021, now is the time to act. The economy has shrunk, and experts are warning that we will not see any recovery until the end of 2022. This, along with the expected introduction of tax increases, the end of furlough and the end of the stamp duty holiday will combine to make the end of 2021 a difficult time for those looking to sell their house.
That’s why we’re here to help. Olivia Rose Estates can buy your house in as little as 7 days, or to a timescale to suit you. With us, you don’t need to worry about the delays that typically come with selling on the open market, and you can sell quickly and easily to make the most of the stamp duty holiday. For your free cash offer, get in touch with us today!
