Commentary by Lee Wilkinson, External Audit Director, PwC
Published in Yorkshire Post 3 April 2021
Projecting house prices is challenging during normal times, but with the level of uncertainty currently present in the economy, it is even more complicated. While there are certainly factors that will support house prices in the coming months, there are also large risks to the economic outlook created by COVID-19.
The support of the, now extended, stamp duty holiday has allowed home-owners to save significantly on an average house. Along with lower interest rates, meaning cheaper finance, and the Help to Buy equity scheme has made housing more accessible.
The lasting impact of Covid-19 is yet to be seen or felt on UK Housing however there is an interlinkage to how the economy approves and certainly the sentiment of homebuyers in a market with increased unemployment and uncertainty around what the future will bring them.
The recent Budget 2021 announcements of extending the stamp duty holiday and the new mortgage guarantee scheme will be welcome by some but the outcome of (likely) higher house prices will further widen inequalities around the affordability of homes.
The initiatives the Government has introduced seem more drawn to Home Buyers than Generation Rent. The consumers of residential in 2021 favour more towards a lifestyle that involves build-to-rent and this will continue to grow while the continued challenges around affordability will push more to continue to rent.
Lastly with targets being set for Net Zero by 2050 we must reflect that a significant proportion of that housing stock is already built and therefore initiatives to retrofit for the future was a missed opportunity in the Budget to move towards this target.