The housing market was thought to suffer from the pandemic, but it appears it has actually received a boost during the Covid-19 outbreak. As families have had to stay at home more, it has spurred a desire to buy a home or move home. It is thought that home buyers are looking for a home to better suit the needs of a family forced to accept a new normal pushed upon them by a pandemic. Perhaps it is more room, or a garden, or other need.

Like home buyers, homeowners were inspired to borrow due to the pandemic. Many chose to cash out their built up remortgage and reported doing so to use the cash for upgrades and improvements to their property. 

Of course, borrowers of either a remortgage or mortgage were capable of finding low interest rates of levels not seen in many years. The opportunity to save was a big motivator to borrow now.

According to Halifax, UK mortgage applications grew to a twelve year high as house prices increased at the fastest annual pace since mid-2016.

It is also been considered that home buyers as well as homeowners could have been seeking a better place in which to work from home. They chose to borrow to obtain a property that would offer a home office or to remortgage for cash that could provide the ability to create a better working space in the home.

If unemployment rises due to the latest wave of the pandemic overtaking areas, or a recession occurs with the economy, the housing market will then be impacted as was expected at the start of the year. For now, borrowers are taking advantage of the opportunities to obtain a low interest rate and realize their dreams of climbing onto the property ladder. It is keeping the housing market at a level of performance that keeps surprising experts.

The average house price reported by Halifax was £249,870. There was a 1.6% increase from August to September. The annual growth rate was pushed to 7.3%, which was an increase from the 5.2% level recorded in August.

Russell Galley, Halifax managing director remarked, “Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May. Across the last three months, we have received more mortgage applications from both first-time buyers and home movers than any time since 2008.

“There has been a fundamental shift in demand from buyers brought about by the structural effects of increased homeworking and a desire for more space, while the stamp duty holiday is incentivizing vendors and buyers to close deals at pace before the break ends next March.

”It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.

“Therefore, while it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”