The UK government recently declared that the country is officially in a recession, and to make matters worse, it’s the worst recession we’ve ever faced in history.
The devastating effects of Covid-19 on the economy made this announcement unsurprising, leaving people increasingly worried about how to navigate their lives in the midst of a financial crisis.
One of the sectors that have received significant attention during the pandemic is the property market. However, amidst the doom and gloom of the recession, an increasing number of industry experts are revealing that now might be the perfect time to buy a house.
If you’re contemplating buying a property or had a purchase that was halted because of the coronavirus, here are four reasons why it’s a good idea to buy a house during a recession.
Housing Prices are Decreasing
Halifax confirmed in July that house prices have dropped for four consecutive months, marking the first time in over a decade. With over a million people claiming unemployment benefits in the last three months alone, and with this figure expected to soar as the furlough scheme ends in October, housing prices are predicted to continue falling into next year.
For those fortunate enough to be in a relatively secure job, this is an excellent opportunity to purchase a property for significantly less than the usual cost. This means there’s a chance to upgrade to a higher-priced property that wouldn’t typically be affordable, or even own a home for the first time.
Time is of the Essence
Although housing prices are still decreasing, it’s better to begin looking for properties sooner rather than later. Leading housing consultancy Savills has predicted that the South East, along with London, will be among the first regions to see a rise in housing prices due to the availability of more jobs in resilient employment industries.
Stamp Duty Holiday
In July, the government introduced a ‘Stamp Duty Holiday’ to stimulate the UK economy. There is now a temporary suspension of stamp duty for all properties under £500,000, and buyers purchasing more expensive houses will only be taxed on the amount above this price. This means you could save up to £15,000 if you purchase a house before March 2021.
Help to Buy Scheme
The government also extended the building deadline of new houses in the Help to Buy Scheme, as many new build completions have been delayed due to the pandemic. This scheme means that first-time buyers and current homeowners purchasing a new build property under £600,000 can pay as little as 5% deposit and borrow 20% of the property price interest-free for the first five years. The deadline for this scheme has been extended to 28th February 2021.
We understand that not everyone is in a position to buy a house at this time. However, if you’re considering taking advantage of the current situation, please don’t hesitate to contact us at hello@remmushomes.co.uk, and we’ll be happy to talk to you about our upcoming properties.