What Will Happen To House Prices After Furlough Has Ended?

The property market received welcome news on March 3^rd, when Chancellor Rishi Sunak delivered his budget. As the Office for Budget Responsibility has reported that the UK has already borrowed £355bn and is expected to borrow a further £234bn during the next financial year, the nation was poised to hear how the Chancellor plans to recoup these losses. Everyone from buyers and sellers to estate agents, conveyancers, mortgage brokers and anyone involved in the property industry is impacted by these economic changes. So, what exactly was announced regarding the furlough scheme?

Furlough To Be Extended Until September 2021

The Chancellor confirmed that the furlough scheme will continue to pay 80% of employees’ wages for the hours they’re unable to work during the pandemic. This scheme has so far protected more than 11 million UK jobs since it began in March 2020. It had originally been due to end in April 2021, prompting much speculation about how this would impact the housing market.

Has The Furlough Announcement Saved The Housing Market?

The housing market has enjoyed an unprecedented boom throughout the pandemic, contrary to initial fears that there would be a crash. But such a fall is predicted to happen as soon as the furlough scheme ends, when the government is no longer keeping people in work. Any rise in unemployment is expected to coincide with house price falls in the market, particularly when vendors need to sell quickly to release equity. But the extension of the furlough scheme could well keep house prices pushed up throughout the spring and summer, when property activity is generally strong anyway.

What Will Happen At The End of September?

There are concerns that the furlough scheme extension is putting off a crash, which could happen when the government pulls the plug on financial support. The end of furlough will coincide with the end of the government’s stamp duty holiday which has also been extended until the end of September and has been a driving force in the market.

But with the success of the vaccine rollout program and buyers still making property choices based on lifestyle changes rather than economic incentives, there’s every reason to believe that the housing industry can stay strong. In February, Nationwide reported that house prices were already rebounding before the Chancellor had confirmed any plans to extend his support. Prices were up 0.7% from January 2021 and 6.9% in comparison to February of last year.

Choosing The Right Area

Popular residential areas such as Romford will always withstand the general fluctuations of the housing market. Sandwiched between the open spaces of rural Essex and the convenience of having London on its doorstep, Romford property prices are highly unlikely to crash. The arrival of Crossrail and the subsequent regeneration of the area will keep investors interested in the area during the years to come.

About Keystones

Our Romford estate agents are experts in the property market, obtaining a wealth of knowledge to help you find your perfect home. If you require some assistance when searching for or selling your Romford property, contact us today.