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Lockdown 2.0 could fire up house prices

Shut away in our houses, staring at our four walls once again – the prospect of more coronavirus restrictions means that it is Groundhog Day for the foreseeable future.

This means that Lockdown 2.0 could pour fuel over the red-hot property market. The reasons why demand soared once coronavirus restrictions were lifted will be felt even more, and it could lead to an increasingly frenzied rush to buy a lockdown-ready home.

The people buying and selling homes right now, in a recession and with unemployment likely to soar in the next few months, largely fall into two groups. There are those who really have to move, due to a different job, a growing family, a changed circumstance.

And then there are those who are being led more by emotion. For them, the first lockdown had such a profound psychological impact that they felt they needed to move for a different lifestyle, to find a home in the countryside to sit out any future lockdowns with far more space and fresh air. This is a perfectly legitimate reason to move – and Chancellor Rishi Sunak’s stamp duty holiday makes this moment a good one to take the plunge.

For many, this emotional lever has outweighed the economic worries that might have added more doubt and hesitation during normal times. Another lockdown could harden buyers’ resolve to move, perhaps forcing them to offer that bit more over asking price to secure the deal.

The lockdown-rooted desire for more space has turbo-charged the property market, particularly in rural areas that have links into cities, for when office life returns one day. These buyers are mostly at the higher end of the market, equity rich and finding it easy to get lending; first-timers with small deposits are less lucky.

Lockdown 2.0 could fire up house prices
By Asif Kola