There is no denying the extent of the impact COVID-19 has had on the UK.
Little over a year since the country entered its first national lockdown, businesses, investors and consumers have had to adjust to what the so-called “new normal” – a term referring to the changes that have been implemented to contain the virus.
However, after months of social distancing and lockdown restrictions, it looks as though we might be seeing the beginning of the end of the pandemic.
The vaccination program is proving to be a great success.
On top of this, the government has also set out its roadmap for the total lifting of all social restrictions by 21 June 2021 at the earliest.
While plenty stands ahead which could yet set this back, there is good reason for the real estate industry in particular to take an especially sanguine outlook.
Preparing for the summer
From my perspective, agents, brokers and lenders need to be prepared for what is looking to be a busy summer for property investment. With Chancellor Rishi Sunak announcing the Stamp Duty Land Tax (SDLT) holiday extension – which increased the 0% rate to £500,000 – for a further three months to the end of June 2021, the government has set bold policy to grease the wheels of the real estate industry.
The SDLT holiday not only helps to unleash the long-run spending power of first-time buyers; it will also continue to attract investment in high-value property from international buyers.
Overall, this is a promising sign for the UK economy as it slowly transitions out of lockdown and adjusts to the conditions of the post-pandemic world.
The holiday might have been extended but in reality, it does not give buyers a lot of time to complete on a sale before the end of the new deadline.
Not only must buyers find an appropriate property, but they must also ensure they have access to the finance needed to complete on the sale. This will be easier said than done.
Like we saw in the lead-up to the 2021 Spring Budget when the deadline extension had yet to be confirmed, lenders were inundated with requests from buyers in need of fast finance.
Thankfully, specialist finance lenders like Market Financial Solutions (MFS) were prepared to meet this influx in demand, delivering tailored loan packages that could be delivered quickly due to access to inhouse credit lines.
The extension has given some temporary breathing space. That’s why lenders must put in place the necessary processes so that they can satisfy the likely spike in demand for finance in the coming months. Failing this, there is a risk that buyers seeking to take advantage of the SDLT holiday will miss out.
Supporting the UK’s economic recovery
In the face of the post-Covid economy recovery, and the stimulus measures the government has introduced to get things going, the real estate industry stands poised to sit at the heart of a bullish and confident UK economy.
The government realises this, which is why there has been a significant focus on measures to encourage capital inflows into property.
As a testament to this, house prices have continued to rise – always a promising indicator of a robust marketplace with high levels of demand, and a sure test of the continued good confidence of buyers in the value of investing in property.
Underpinning this impressive growth has been an equally steady influx of transactional activity, as well as a boom in enquiries.
For these reasons, I look to the future with optimism.
Despite the immediate challenges posed by COVID-19, a long-term perspective shows that the property market is ideally positioned for impressive growth.
This has been kicked off by the SDLT holiday and I am confident that the momentum will continue as the country transitions through its post-pandemic recovery.
Author: Paresh Raja is the founder and CEO of Market Financial Solutions (MFS) – a London-based bridging loan provider. Prior to establishing MFS in 2006, Paresh worked as a senior professional consultant in one of the top five management consultancy firms, and also set up an independent investment group.