Pandemic Has Surprising Impact on Lending and Housing Market

Pandemic Has Surprising Impact on Lending and Housing Market

The housing market has benefited unexpectedly from the pandemic. It would have been thought that if yet another negative impact took its toll on the economy the housing market would be in trouble. However, as the pandemic forced lockdowns and a new normal for working and schooling, our homes took on a new focus. The pandemic lifestyle required new spaces, more time spent at home, and homeowners, especially, started looking around and seeing their property in a new light.

The need for better areas in which to work privately from home to be the most productive, areas in which children could study with few distractions, and perhaps an area for home entertainment, a fitness area, and greater space for food storage prompted homeowners to improve and upgrade their homes, or to move.

The pandemic’s first impact on properties was revealed when homeowners remortgaged not only to save money, but to turn their built up equity into cash. The cash was used to invest back into the dwelling for upgrades, improvements, and other needs to make home serve the various functions it now had to fill. In addition, it could offer added value to the property after certain improvements.

The second wave in the housing market that developed due to the pandemic lifestyle was demand from home movers. The families may have found that their property was not suitable at all for the new needs the pandemic had forced and rather than stay put and improve, they moved. Home movers continue to show very strong demand in mortgaging and in home buying.

It could be, too, that homeowners took advantage of the demand in the housing market and chose to sell and buy a new property rather than endure the current mortgage they were locked in or to get a new property and a new low interest rate when a remortgage was unavailable. 

The low interest rates also motivated first time buyers to come to the market and the stamp duty holiday offered even more savings so their money extended into higher priced properties.

The housing market continues to surprise during the pandemic. It is expected to remain viable and attractive throughout 2021, though perhaps less so after the holiday ends for the stamp duty in March.

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