Trying to get on the property ladder is daunting, regardless of whether this process was taking place within the pandemic. The stamp duty holiday was introduced by Chancellor Rishi Sunak in July 2020 as a way to alleviate finances from buyers that were affected from Covid-19.
The aim of the stamp duty holiday was to erase the need for buyers to save up to thousands of pounds, therefore causing a boom in the property market as many people wanted to beat the stamp duty.
Before speculating as to whether house prices will fall in 2021 now that the stamp duty holiday has ended, firstly, it must be considered whether the stamp duty holiday has caused house prices to rise.
It was recorded that the stamp duty holiday was effective in stimulating the housing market, as according to the Nationwide Building Society, UK house prices rose 13.4% in the year to June, which was the fastest the numbers have grown since November 2004. The building society said the average house price increased from £216,403 to £245,432 in June 2020.
The pandemic has caused a twist of events – it has stimulated the housing market, rather than stunt its growth which is what usually happens. The pandemic has made people redefine the idea of ‘home’ and shifted priorities amongst buyers. With houses being converted into offices, gyms and schools during lockdown, people have had time to think about their home in terms of space and where they live.
It is uncertain as to whether house prices will fall now that the stamp duty is reintroduced as there are many factors to consider. Unemployment would need to be closely analysed, recovery of the economy, people may be forced to sell and fewer will want to buy.
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