No one can deny that the past 12 months have been difficult. It has been a tumultuous year and we are by no means out of the woods yet.
With the coming of the first lockdown in the Spring last year the world as we knew it became unrecognisable. The UK economy almost closed down overnight, and parts of the property market went into virtual hibernation. The residential market on the Isle of Wight did not!
Isle of Wight Residential Property Market during the pandemic
At the start of the lockdown there was market activity, with a determined group of mainland buyers seeking a new lifestyle, to a very large extent only then possible due to the advent of “working from home”. House with gardens were viewed by video and offers made, surveys instructed and purchases made. There was almost an air of stealth about it.
Following the easing of restrictions in June and July 2020 the residential property market went into overdrive. A number of factors probably came into play not least the “Stamp Duty Holiday” announced by the Chancellor of the Exchequer which significantly reduced Stamp duty liability until March 2021 (now extended to June 2021).
The Island was not unique in seeing these factors. Perhaps the combination of relatively affordable detached houses with gardens and sea views, large enough to provide a home study, but with the prospect of a fairly quick and easy day trip to London by train (if office meetings were to ever return!) is not available in too many parts of the country.
A significant number of Daniells Harrison instruction for RICS Homebuyers Reports and Building Surveys came from mainland buyers looking to relocate to the Isle of Wight, or trade in an existing modest second home for a larger version. There was a perception that there was greater freedom of movement on the Island, together with the increased value for money for homes on the Island in comparison to London and the Home Counties. There were several comments made by clients that if they had to work from home, they wanted to live somewhere that they could go for a walk on the beach before starting work!
The second half of 2020 was one of the busiest periods that we can remember at the Isle of Wight office. Market activity has eased somewhat in the first quarter of 2021, but is still busy. It has become more apparent that there is little to be saved in reduced Stamp Duty as the initial purchase price of the property has probably increase by a similar amount, wiping out any savings in Stamp Duty. Time will tell if a further extension of the Stamp Duty Holiday will result in a second spike in activity.
Isle of Wight Commercial Property Market during the pandemic
The market has also changed significantly in the commercial property sector. Before the pandemic, the retail sector was struggling, and several national retailers shut up shop on the high street. The Covid-19 Pandemic accelerated the rate of change with a significant number of national retailers closing down.
However it is not all doom and gloom. Faced with prolonged periods of furlough or redundancy, the entrepreneurial spirit seems to have flourished. Combining this with an increased desire to buy local, there has been somewhat of a renaissance for small local shops. This has also been mirrored in the demand for small light industrial spaces, which have been very active on the Isle of Wight in recent months.
Cowes High Street in pre-COVID days
So what can be said for the next 12 months? So much will depend on how readily the UK economy can be weaned off lockdown measures. The mood music from Government this time around seems to be much more cautious. The extension of the Stamp Duty “holiday” is unlikely to have a significant impact in the residential property market but may help to reduce the level of market shock that might have been anticipated in April. That has happened in the past when such policies to support the property market has ended. This may simply be “kicking the can down the road” until later in the year. It remains to be seen.
Daniells Harrison Chartered Surveyors have been providing surveying services and property advice for commercial and residential property owners on the Isle of Wight, since 1996. Please get in touch if we can help with your property.