The July buying boom of residential real estate was record-breaking mainly due to the stamp duty reduction and apparent recession the country was slumping into. Over £37bn worth of property sales were recorded during the boom, and it served as the busiest home-buying month in the last ten years.
The spike in property transactions occurred due to the inactivity of the housing market during the coronavirus lockdown coupled with the stamp duty reduction that was put in place to encourage people to get more involved in the real estate market.
Eitan Eldar, the CEO & Founder of EEH Ventures, said:
“We at EEH Ventures recognized a rise in sales of smaller apartments during the real estate buying boom, approximately in the £400,000 range. The big sales boom is most likely due to the exemption of tax on apartments up to £500, 000- which will be kept in place until March of next year”.
By comparison, real estate sales were far higher in July 2020 than in July 2019 despite the coronavirus pandemic. In July 2019, only about £25bn worth of sales were made compared to the £37bn sales recorded this year.
The market has slightly declined in August with the average asking price in the UK at £319,497, a 0.2% fall from July’s £320,265. Nonetheless, Scotland, Wales, Yorkshire, North West England, the East Midlands, West Midlands, the Humber, and the East of England record new highs in August.
Though other places are recording new highs in August, London pulled the national asking price down to around 3% of the average prices.
In Eitan Elder’s words, “I believe that the price drop of 3%-5% is temporary. And it presents everyone with a golden opportunity to buy and invest in residential real estate in the UK. Because, very soon, people will go back to work, and London’s real estate market will rejuvenate, skyrocketing the average prices again”.
As a result of the coronavirus pandemic, many people have resolved to remote work from home, making it inconsequential for them to commute to big cities during workdays or live in urban regions near their offices. With this, the residential real estate in the UK has more demands.
Therefore, commercial real estate in the UK, such as office buildings, will be converted to residential buildings and incentivized by the city.
“There will be some major changes and incentives to transform commercial real estate into residential, especially in London. And permits will be easier to access; invariably solving London’s housing crisis”, concluded Eitan Eldar.