Are squirreled savings set to be unleashed on the London housing market?
- 7th July 2021
- Buying Property News
Lockdown savings likely to stave off stamp duty cliff edge and further increase demand
The UK has collectively built up £184 billion in savings during the pandemic as lockdown prevented individuals from eating out at restaurants, travelling abroad, shopping on the high street and even commuting.
A new proportion of pent up savings has been accumulated by those in their late 50’s and beyond (baby boomers), who are passing on their savings to their children, through the well-known concept ‘Bank of Mum and Dad’.
This built up cash and record low interest rates mean prospective homebuyers are able to increase their budgets, while demanding more from their future home.
In a densely populated, bustling city like London, extra indoor and outdoor space is likely to be one of the first things any prospective buyer with additional savings will look for in a property. Extra savings and the prevalent problem of an overall shortage of housing stock could also mean that buyers are willing to pay above the asking price for a property they really love.
Lockdown has prompted many organisations to adopt remote working. As a result, home offices are increasingly becoming a common demand for buyers – being a space that people can remove themselves from any noise and distractions to conduct their work.
Stephen Ludlow, Chairman at ludlowthompson says: “The build-up in savings during lockdown is undoubtedly a positive for the property market.”
“The phenomenon of ‘revenge-spending’ to make up for opportunities lost over the last year will mean buyers are willing to stretch a little bit further in order to get exactly what they want from a home”.
“Despite initial concerns of how the pandemic would affect the housing market, these fears have since been diminished. Instead, the build-up of both demand and cash could further support the market beyond the perceived stamp duty holiday cliff edge.”
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The build-up in savings during lockdown is undoubtedly a positive for the property market
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