Lockdown Restrictions Fail to Hamper Housing Market Activity in the UK
Most of the United Kingdom is once again in some form of lockdown. Nevertheless, there is something distinctly different about lockdown 2, particularly when viewed from a financial perspective.
Lending and borrowing remains a challenging subject for providers and customers alike, though not nearly on the same level as when the pandemic first hit.
Why Lockdown 2 is Different
When COVID-19 made its unwelcome arrival at the beginning of the year, the decision was made to shut down the country practically in its entirety. Rather than simply being slowed down or altered in trajectory, vast proportions of the economy were brought to a screeching halt.
The housing market was one of the main examples (and victims) or the first lockdown, which for several weeks ceased to exist.
The UK is currently under a second lockdown, once again having an impact on the economy. Nevertheless, today’s lockdown is different from the previous lockdown in that the activities that are the lifeblood of the real estate market have been permitted to continue.
Property valuations can still go ahead, inspections can take place and transactions are being processed as normal. Or at least, as close to ‘normal’ as things are likely to get for the foreseeable future.
Pent Up Demand Fueling Market Activity
What is also interesting is the way in which pent-up demand from the first lockdown continues to fuel market activity during the current lockdown. In what is usually a time of near-universal reluctance and fear over ongoing economic uncertainty, movers and first-time buyers alike are choosing to go ahead with their property purchases regardless.
Lenders and brokers alike have also cited the government’s recently extended stamp duty holiday as a catalyst for the current spike in activity. For those able to complete qualifying transactions before March 31, 2021, savings of thousands of pounds are still available. An opportunity many are apparently finding too good to pass up.
Alternative Lending Options
Applications and general housing market activity may be on the up, but lockdown is once again bringing one major challenge into the mix:
Extended application processing times and the subsequent delays and complications that accompany them.
Even now, many prospective homebuyers are finding themselves in a position where the March 31 stamp duty deadline is too close to call. Major banks and High Street lenders are not only tightening their restrictions with regards to who can qualify for a mortgage but are also taking longer than ever to process applications and release funds.
This has spurred many applicants to consider alternative lending options, such as bridging loans. Accessed via an experienced independent broker, a bridging loan can provide a fast-access alternative to a conventional mortgage – often released within a matter of days.
The extent to which the rollout of the COVID-19 vaccine influences any of the above remains to be seen. As far as the housing market in general is concerned, you need only look at fast-accelerating property prices in key areas to see how strongly the sector is performing – even in the face of a second national lockdown.