How the pandemic reshaped the luxury property market
We’ve all heard a great deal about the mass exodus from cities sparked by the coronavirus pandemic, as millions of people sold up their urban homes in favour of the fresh air, open space and tranquillity of the countryside. Nowhere has this been more evident than in the luxury property market, with Savills reporting that it had sold (or was on the verge of selling) an astonishing 21 estates valued at more than £15m since the March 2020 lockdown, against just one in the whole of 2019.
Wealthy buyers flee the commuter belt
Many of the affordable commuter towns we profiled in our 2020-21 Private Wealth Guide, such as Hoddesdon and Basildon, have taken a dive in popularity during the pandemic, with home working lessening the need to live as close as possible to the City. Meanwhile, wealthy workers residing in London itself fled the capital en masse, seeking secluded countryside retreats in which to while away the pandemic.
According to Zoopla, the wealthy are now looking at properties further afield, creating new property hotspots in areas such as Suffolk, Hertfordshire and Essex. While house prices in Hertfordshire commuter towns slumped (Hoddesdon prices fell by 1.95% last year), prices in wealthy Harpenden, for example, grew by an astonishing 8.48%. Over the border, the property market boomed in historic Colchester, with 1,806 properties changing hands, while Harlow, an affordable commuter hotspot, proved far less popular at just 683 properties.
£1m+ market booms
Across the UK, searches for mortgages over £500,000 plus have increased by 43% since the beginning of the Stamp Duty holiday, while the exclusive £1m property market is experiencing huge demand. In both Hertfordshire and Essex, the market in properties valued at over £1m has soared, with the trade in these properties up by 32% in Hertfordshire, between the start of 2020 and the end of September, and by 22% in neighbouring Essex during the same period.
Stamp Duty holiday benefits wealthier buyers
Meanwhile, landlords and wealthy property investors looking to add to their portfolios have been cashing in since the nine-month Stamp Duty holiday was announced in July 2020. Sales to landlords hit their highest levels in four years in November, with this group comprising 15% of all November sales. While the Stamp Duty holiday did not abolish the 3% surcharge paid by buyers of second homes or investment properties, the lower basic rate has still been worth thousands in saved tax.
The luxury property market is booming; the pandemic certainly hasn’t affected the rich pickings available across Hertfordshire and Essex. Take a look at our 2020-21 Private Wealth Guide for more information and expert property insights.