The COVID pandemic has affected almost every business, with some people losing their jobs and businesses shutting down. Among the affected sectors include the housing market where it has been affected by factors such as:
? People being unable to afford new homes
? Some marketing methods becoming ineffective
? Most potential buyers concentrating more on staying safe
? Lockdowns and curfews preventing people from moving and traveling freely
The outlined factors are mostly a result of the coronavirus, and they are to affect this market even in 2021. Here are some of the ways the COVID pandemic will affect the housing market in 2021.
Reduced Number of Potential Buyers
Anyone looking to sell a house quickly in 2021 might find it more challenging since most people cannot afford new houses. There are a lot of people who have had to adjust their priorities after coronavirus, with such people spending more on staying healthy instead of buying new houses. Rates of unemployment have also increased, which means that people do not have money to purchase new houses.
Slower Rates in Building New Houses
Developers are also slower in building new houses mainly because they are afraid people might not be interested in new homes. These include developers who are already struggling with the already built houses. Such developers are likely to concentrate on other types of investments instead of trying to build new houses.
A Fewer Number of Financing Options
Most lenders who were willing to give loans and mortgages to customers so that they can buy new houses are no longer interested in giving such loans. You will have a harder time in 2021 convincing most financial institutions to give you a loan for a new house. According to David Beard at financial comparison website Lending Expert many lenders and mortgage providers have also been affected by the coronavirus, and as a result, they have fewer resources at their disposal, and they are also worried that more people might be unable to repay the loans they take.
Unwillingness to Move
One of the ways that the authorities are dealing with coronavirus is encouraging people to avoid unnecessary movements. This has made more people feel that they are safer where they are, and as a result, they do not need to move. These include people who would rather remain in their older homes for their safety, even if they can afford to purchase newer houses and move.
Lower Prices For House
The housing market will react to the low demand for houses by lowering the prices for homes. Most people selling their houses will not mind selling for prices even lower than the market value since the number of interested buyers will be lower. The Budget Responsibility office predicts a 8% drop in house prices in the UK by mid-2021. This will affect the general housing market in 2021, with houses that were going for a specific price becoming available for much lower prices.
The different changes in the housing market in 2021 due to the coronavirus will last even after the pandemic is dealt with. It might take time before the economy can recover, and as a result, these changes are likely to remain in place for a considerable time.