When the market closed entirely during the lockdown in April, experts predicted the worst. However, pent-up demand has helped the market reopen on a strong foot. The stamp duty holiday introduced for nine months has also helped to spur interest. Buyers and sellers alike are keen to take advantage of the financial incentives which come with the higher tax threshold. It is evident now that buyers have started to make up for the lost time. 

 

In August, prices accelerated the most in one month for more than 16 years, according to Nationwide. They describe the sudden recovery as ‘unexpectedly rapid’. Experts predict fewer than 1.1 million sales will complete this year, compared to each year from 2014 to 2019, where the number was around 1.2 million. Given the bleak outlook most held back during the lockdown, when house prices fell for four months consecutively, the figures are promising.

 

 

Nevertheless, the recent trend of high activity levels has begun to appear superficial and impermanent. Fears have begun to muster that the upwards trend will soon plummet. This is partially due to the tax break encouraging those who were intending to buy next year to advance their plans. This could create a vast drop in demand when the tax break ends in March 2021. Moreover, critics fear that the continually increasing likelihood of an imminent second lockdown may have an impending effect. Ongoing financial uncertainty and instability as a result of the pandemic have near but crushed consumer confidence. The reintroduction of national lockdown measures would be sure to topple the already fragile economy.

 

The question also remains whether first-time buyers are able or willing to enter such an uncertain atmosphere. These potential buyers have been some of the hardest hit financially by the coronavirus. As a result, this demographic is, for the most part, shut out of the market. The sudden kick-back into action also means that buyers experience delayed processes. High-demand causes mortgage processes to extend and become prolonged as banks and brokers deal with an excess of both back-dated and current requests. The property website Rightmove recently published estimates indicating that there are currently 40 percent more sales in progress than is typical for this time of year, resulting in delays. These setbacks, as well as the endless uncertainty, could cause consumers to lose confidence in the market and activity to plummet rapidly.