A lot in life has changed since the pandemic started. The way we shop, see friends and family, and work have all been impacted. However, ensuring that we remain optimistic and continue with our life goals and ambitions is the best way to continue with our lives.

One life objective that many people are still working towards to is owning a home. Construction of new homes and organised house viewings have been allowed since the first national lockdown was eased in England, and people are continuing on their house-hunting journeys. However, like most things during the pandemic, the way we usually do things has changed.

Looking for answers

With great change comes great questions. Understanding what is possible during the pandemic and between national lockdowns has left potential home-buyers asking how they can continue their journey to homeownership.

National housebuilder St. Modwen Homes has reviewed the changes in Google search data in the past year to see which home buying-related questions have seen a recent surge in searches. This allows us to see which questions have become more popular during the pandemic, and which breakthrough topics have shown a change in the property market.

Between January 2020 and January 2021, Google searches for “should I buy a house now” and “is now a good time to buy a house” increased by 500 per cent and 350 per cent respectively. This may suggest uncertainty surrounding financial adversity, but also the significant benefits of buying a house during the pandemic. While this depends on personal financial situations, the benefits should and will be discussed. However, this may show an eagerness for the next home-buying generation to get their foot on the property ladder.

Popular breakout searches in the past year include “buying a house during coronavirus” and “how much do I need to save to buy a house”. Of course, buying a house during the coronavirus is allowed, though how we organise the process has changed. Equally, buying a property during the pandemic has money-saving benefits. Lower deposits for those who have saved with a Help to Buy scheme combined with exclusive deals for key workers mean this may be the best time to purchase your dream home.

In this article, we will explore these questions, explore the costs of buying a new house, and how you can save money when buying your house, especially during the pandemic.

Savings to be made

Though the pandemic has brought some financial uncertainty, buying a new home now may be the best option for those looking to get on the property ladder — especially people defined as key workers. Incentive schemes to encourage new buyers have created the opportunity for home movers to save thousands of pounds.

The UK government has extended the temporary reduction of Stamp Duty Land Tax until 31^st March 2021. This means that if you purchase a residential property below the value of £500,000, you will pay zero tax on the house value. From 1^st April 2021, this will rise to two per cent on properties above £125,000. This means that if you buy a house for £300,000 now, you could save £3,500 in stamp duty before the tax reverts to normal. These savings can continue for customers of St. Modwen Homes, who has extended this Stamp Duty holiday until 1^st June 2021. This extension means there is now more time to save when buying a luxury new-build home.

For key workers, there are additional savings to be made. The Office for National Statistics estimates that 33 per cent of the UK workforce are in key worker occupations and industries. These workers could save when buying a new home through exclusive deals and special initiatives, which are offered to thank them for their professional dedication during the pandemic. St. Modwen Homes continue to present saving for key workers. The company has created a special offer for those who work in essential services. This includes NHS staff, teachers, and supermarket staff, among others, who continue to lead the fight against the coronavirus. This offer can include contributions towards home enhancements such as flooring, turf, or kitchen upgrades. You can also be supported with legal fees and moving costs, saving homebuyers some of the costs incurred when buying a home.

When applying for a mortgage, banks may expect you to have saved around 15 to 20 per cent of the property value as a deposit. This is to ensure financial responsibility and the ability to pay back the loan. The maximum loan amount is usually 4.5 times your annual salary. However, the Help to Buy scheme can help reduce the expected deposit.

The Help to Buy scheme allowed the government to contribute 25 per cent to the value of your savings, if you deposited money in a Help to Buy ISA before November 2019. From April 2021, the government’s Help to Buy: Equity Loan scheme means you could borrow up to 20 per cent of the cost of a new-build home up to £600,000. These initiatives mean that you may only need to save a five per cent deposit when buying a new-build home. This could help you keep more money in your pocket. You should speak to your bank or lender to understand individual policies.

Therefore, while the pandemic continues to create uncertainty, there are definitely savings to be made. Buying a house is a big step, but the financial benefits of doing this during the pandemic create attractive prospects for taking that leap as soon as possible.

Virtual viewing

The process of buying a home during the pandemic has changed, especially when it comes to viewing the house you intend to buy. Open houses are no longer allowed because of social distancing restrictions. You can still view a house in person, but this should be organised, and any social mixing should be kept to a minimum.

A safer alternative includes a virtual home viewing. For example, if you were to look for new builds in Wantage, you can view available properties and access floorplans, videos, and images of the property. New technology also allows you to view the property through virtual eyes. 360-degree images mean you can take in every aspect of the property before you decide to buy or organise a viewing in-person.

What’s more, you can book a virtual tour of the property you are interested in. Estate agents will help you understand your prospective house by taking you around on a personal video tour and answer any questions you have. The pandemic has forced everyone to adapt to the unusual situation, but this allows us to understand properties in more depth than ever before.

Though it depends on individual circumstances, it is clear that more people are looking to buy their own houses and are researching the best way to do it during COVID-19. We’re all anticipating a return to normal, but the financial schemes and benefits available during this adverse time have created an opportunity to save money, while new virtual platforms are allowing us to understand the properties we buy in more depth. COVID-19 has changed the way we buy houses, but it shouldn’t stop you.

Coronavirus has had some unprecedented impacts on home valuations. The real estate market has been one of the most affected sectors since the pandemic hit. The effects came from many people losing their jobs, businesses being shut down, and wage cuts. People became cautious about buying property, especially houses. That led to the house prices going down for the housing market to survive. A lot of people took advantage of the costs and bought homes during the coronavirus crisis. The purchases also affected the home valuations in the long run. The residential real estate will take some time to stabilise after this health crisis.

Impact of Coronavirus on Home Valuations

The UK government had to put the economy on hold with consistent lockdowns. They also had to come up with measures to support the real estate market and other businesses. Some reduced the tax on the property during purchase to give way to buyers. During that time, home values went down drastically. Homes were being sold at a lower price, and so many people took advantage and bought them. The home valuations declined immensely during the period to avoid crippling the market entirely. The rise of unemployment was the main factor; the health crisis had people investing in their wellbeing and more pressing matters. There were no significant home sales, and that is why they reduced in value.

The stay at home orders made many home sellers take their houses from the market. The sellers were afraid of having strangers at their homes because of the virus. It also meant that few buyers were willing to go and look for houses. No buyers meant that all the homes in the market would stay for as long as the health crisis persisted. The home valuations and sales were very low because of the increase in delisted houses and the lack of new listings. There was no demand in the housing market; people were working from home or experiencing financial strains in one way or another. Online inquiries also reduced during the lockdown periods. The prices had to go down dramatically for people to consider acquiring new homes during the pandemic.

The low home valuations were because of the lack of demand. The house value and prices depend entirely on the local conditions and market. Areas that were severely affected by the coronavirus pandemic experienced even lower home valuations. The prices went even lower compared to other places. Many people were avoiding such places, and there were deficient real estate activities. Without lowering the listed home prices, there would be zero sales. The covid-19 cases determined the decline in the demand for houses in the area. The higher the cases, the lower the house value would be. Despite the government’s tax reduction interventions, such areas still experienced low residential real estate activities.

Since late last year, the home value started to increase. Buyers began to flock the market, and purchase activity increased. However, the supply did not recover at the same time. Many people were still holding on to their homes, and the house listing did not increase. The health crisis was still an issue; people were still working and learning from their homes, so selling became difficult. The economic instability has also kept homeowners from listing their properties. Especially for homeowners who lost their employments, their homes became a safety net. Even if there were intentions of selling, people started having second thoughts. The value has continued to increase, and it will continue to go up even after the pandemic. The home valuations are expected to go up in the post-pandemic times.

Conclusion

Despite the uncertainty around home value because of the coronavirus pandemic, real estate is still a significant investment. The house prices will continue to go up as the market recovers. Pending sales started to go down as people were finalising the deals that happened before the crisis. With the possibility of a vaccine, the house value will continue to increase. If the unemployment level goes down and people resume their works, the normalcy may take the home valuations back to where they were before covid-19. It’s still uncertain how long the real estate will take to return to normal, but the improvements are visible. No one knows if the house value will go past where it was or lower than that. People are still dealing with the pandemic’s impact and the economic effects it had on different sectors.