The UK’s housing market suffered from early Covid rules, as the Government introduced the first nationwide lockdown in spring. Measures kept people inside while industry leaders adapted to the pandemic. The market has had mixed success since then, but vaccination has inspired some hope. UK health workers have now vaccinated more than 10 million people and nearly 30% of adults. At their current direction, the programmes should cover the first five priority cohorts laid out by the Joint Committee on Vaccination and Immunisation (JCVI) in the next two weeks, NHS leaders have said. As immunity spreads, the country can look forward to fewer Covid measures which should eventually revitalise the economy. Experts believe the path ahead for housing is uncertain, with several factors likely to impact activity. Commentators believe the same appetite for homes remains, which has led lenders to axe interest rates. But house prices have started to dip, and how the market performs depends on several factors. With the market housing benefitting from Covid conditions in some respects, mortgage lenders have been gradually returning products with lower interest rates and higher loan to value ratios to the market every day. This trend looks set to continue while the appetite for new homes is strong, but long term, things are far from certain. There have already been signs that house prices are beginning to dip as the stamp duty relief deadline looms. Whether the market remains strong in the longer term depends on a range of different variables. New measures promised to help stimulate first-time buyer activity could counterbalance any lull from the stamp duty relief deadline, but the longer-term economic impact of the coronavirus crisis is still taking shape. The Government’s efforts to vaccinate as many people as possible can only help the situation, and while many other factors are adding to the uncertainty right now, including Brexit and global economics, we remain optimistic about the next 12 months.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of February 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.