Amidst the chaos caused by the global pandemic, property prices are soaring, with the fastest growth rate since 2015.

Market momentum has been driven by the ‘Boris bounce’ following the Prime Minister’s election in 2019 and the number of improvements made to the stock and property markets despite the uncertainty surrounding a no-deal Brexit.

Chancellor Rishi Sunak’s furlough scheme and stamp duty holiday have also helped to promote continued growth in the property market. Now, with the government’s plans for the most extensive vaccine programme in British history, this growth may continue as the country returns to normality.

As the UK continues looking for ways to cope with Covid-19 and its economic impact, the vaccine has raised many questions about the housing market’s future in 2021.

Property investment experts and investors seem optimistic as we move forward. With a new Brexit deal in place and the Covid-19 vaccine on the horizon, it looks promising for the property market. Mortgage rates will likely remain relatively low as inflation is avoided due to the fact there will be no taxes on goods following the exit from the EU.

The buy to let property market will perform exceptionally well given the low mortgage rates and the stamp duty tax holiday which isn’t due to end until March 31st. Hopefully, this should add to the growth of the property market that we’ve witnessed in the past few months.

Stamp Duty Cut

The property market came to a standstill in March 2020 following the news of the pandemic. Still, house prices made a quick recovery in the summer, rising by 1.6% as the property market reopened and the new stamp duty tax holiday was introduced. Those purchasing a buy to live property up to the value of £500,000 can avoid paying stamp duty tax. For buy to let properties, though, investors will pay 3%.

With buy to let investors and homeowners taking advantage of the tax savings, price growth continued to rise throughout the summer and into early winter. Prices were up 5.5% in October compared to the previous year. With the increase in prices and the stamp duty cut in place until March 31st, this has left people feeling very confident about the property market in 2021.

What will happen to property prices in the spring when the stamp duty holiday ends?

UK Property investment specialists RWinvest believe that market activity may slow down post-March, but as history proves, this should only be temporary.

The only issue investors need to consider is how long it will take for them to complete on their property. A downside to the stamp duty cut is the number of sales agreed since the tax savings was announced. With as many as 325,000 sales agreed, it has caused a property market backlog leaving some investors failing to complete before the deadline. Still, with so many great below-market deals available for investors, those who have invested in an off-plan property that’s not yet completed are still able to benefit from huge savings, despite missing out on the stamp duty tax break.

Covid-19 Vaccine

What will happen to UK property prices in 2021 as plans for the Covid-19 vaccines are put in place?

As the UK works hard to roll out vaccines, potential investors have been reassured that the country and the property market will soon make a full recovery.

In November 2020, Matt Hancock claimed that the UK could start to return to ‘normal’ by Easter 2021 if the vaccine is distributed as planned. Providing the claims are met; this leaves the property market with several unhindered months to continue sales and further market growth.

Some travel restrictions may also remain in place, so people might choose to invest in property instead of going on holiday – much like the first UK lockdown in 2020.

There’s no doubt that the Covid-19 vaccine will have a massive impact on whether or not the property market remains stable. If growth statistics in 2020 are anything to go by, it’s clear 2021 will be an excellent year for the UK property market.