Home ownership in 2021 and beyond: schemes, data and advice for buyers in a post-pandemic market

The COVID-19 pandemic has had a substantial impact on most industries, with the housing market being no exception. The unprecedented changes that the pandemic brought shifted the landscape of the housing market, with the effects still being felt over a year later.

The changes have specifically affected those wanting to buy their own home, in terms of the price of buying a property and the factors that come into finding and choosing the perfect home, including getting a mortgage.

As we move into a post-pandemic market, there’s still uncertainties within the industry, but buying your own home can still be a reality.

Insights into the housing market

From interest rates and inflation to unpredictable forces such as a global health pandemic, the housing market is one that is constantly shifting depending on external factors. To better gauge how to navigate a post-pandemic market in 2021 and beyond, we first need to look at the changes the housing market has undergone in the last year or so.

The initial impact of COVID-19

The initial impact of COVID-19 was seen mostly in two areas: from the perspective of the housing industry and homeowners. 

The first lockdown of March 2020 saw the housing market come to a standstill, with construction of new properties halted and economic uncertainty causing many people to stay put and not make large purchases.

The housing market ground to a halt

With lockdown restrictions in place, and the vast majority of markets grinding to a halt, the housing market was no different. Construction of new homes was immediately stopped, making the government’s promise of building 300,000 new homes for the year an unlikely goal. The shutdown of other areas such as mortgage lending and real estate agents meant that almost every area of the housing market had to be put on pause, preventing many from purchasing a property.

This halt was not expected to have a major long term effects on the housing market, however. A contributor post published on Development Finance Today’s report explained that because the dip in the housing market was due to an external factor, rather than an issue with the economy or housing market itself (like we saw with the 2008 banking crisis), the recovery would be quicker.

Many had to hold tight while the worst of the pandemic passed, with promises of the market reopening as soon as possible.

Reopening of house sales

As the year went on and restrictions yo-yoed between complete lockdowns and near-freedom, the housing market was able to recover, with construction resuming, lending re-opening and home hunters moving.

Those who were looking to buy last year but didn't, or those who were able to save some money over the pandemic, found themselves able to buy a house as restrictions eased. However, a report by real estate giant Savills noted in late March 2020 that the pandemic would likely bring about a build-up of demand thanks to the standstill brought about in terms of house buying.

And this was very much the case, with home buyers making their moves as soon as the housing market was open again. This surge in property purchases revealed, according to Rightmove’s House Price Index, a 225,000 shortfall in the number of homes for sale. The demand for properties to buy was significantly more than the current supply, which triggered an increase in house prices of 6%, according to Belvoir.

What the last year or so has taught us

Over the last year, we’ve seen a lot of different changes that have had knock-on effects for home ownership. From a social perspective, our homes have become more important than ever, affecting our priorities in terms of spending. Whilst some have struggled financially, potentially needing to take advantage of mortgage payment deferral programs and other relief measures, many people who were saving for a home were able to hit savings goals by working from home, putting them in a position to buy a property quicker than expected.

Consumer priorities are changing

The coronavirus pandemic has made us a lot more introspective, causing a social change in the way that we interact with others and the choices we make. One of those choices is where we live.

With many of us spending a lot more time at home, and remote working becoming a permanent fixture for many, inside space is becoming more of a priority for homehunters. And, of course, many of us were longing for outside space too after potentially feeling cooped up during lockdowns. According to research by Good Move, searches for houses with gardens had increased by 70% and apartments with balconies by just under 150% in December 2020, showing the importance of outdoors spaces for home buyers.

The housing market has been resilient

The bounce back we’ve seen in the housing market over the last year or so has shown the resilience of the industry. When the construction industry was able to resume operations in the summer of 2020, government figures show that new build completion shot up by 111% between July and September, with 45,000 homes being built in that period.

And that’s all great news for borrowers looking to take advantage of historically low interest rates and get – or move up – the property ladder.

Looking forward

With the changes in people’s priorities and the housing market itself, looking forward to the rest of this year and beyond, we’re likely to see more fluctuations in house prices and demand, depending on COVID-19 restrictions.

In terms of house prices, the steady increase seems as though it will continue, with ONS data showing that average UK house prices increased by 10% over the year to May 2021, up from 9.6% in April 2021. This means that government schemes and support will be even more crucial in helping home buyers secure properties.

Schemes and incentives to remain aware of

Whilst the housing market gets back on its feet, it’s important to remember that there are a lot of schemes and incentives available to home buyers that can help you get on, or further up, the property ladder. The government wants to support people on their way to owning their own homes, so here are some of the ways that you can benefit from that support.

Government schemes for first time buyers

If you’re a first time buyer, there are many options available to you when you are buying your first home. We’re going to focus on the Help to Buy scheme, but you can find more information about being a first time buyer here.

Help to Buy equity loans

Help to Buy is an existing scheme whereby the government offers equity loans to those looking to buy a new-build property for the first time, but wouldn’t be able to make the payments on a low deposit mortgage. The loan can be 20% of your home’s value outside of London, and 40% in the capital. This scheme used to be available to all home buyers, but has recently changed to only be available to first time buyers.

Schemes for existing buyers

Mortgage guarantees

The mortgage guarantee scheme has been rolled out by the government to support both first time and existing home buyers to secure properties with smaller deposits. With this scheme, you could purchase a property with just a 5% deposit. It’s available across the UK on properties with a purchase price of £600,000 or less, where a borrower has a deposit of 5%.

Shared ownership

Shared ownership schemes refer to properties that people can partially own, and pay rent on the rest. They are a much more affordable option for those who want to own their own home but can’t cover all of the costs associated with home ownership. The share that you can buy in a shared ownership property can vary anywhere between 10% and 75%, providing that you are eligible for the scheme.

There’s never been a better time for those looking to go down the shared ownership route, as the government has set aside £4.7 billion of funding to increase the supply of shared ownership properties. This has made it a more realistic option for many.


Stamp duty holidays

Although the government’s temporary stamp duty relief holiday during the coronavirus pandemic has ended, we’re now in a transitional phase where you still can benefit from reduced rates of stamp duty land tax. If you can complete by 30th September 2021, you will only have to pay stamp duty on values above £250,000, as opposed to £500,000 during the pandemic and £125,000 after 30th September 2021.

Housing targets from the UK Government

Regardless of the effects of the coronavirus pandemic, there are still more people who need housing than there are houses available. Owning a home will not be possible without a push from the government in building homes for its population.

As we mentioned earlier, the government pledged to deliver 300,000 new homes each year until 2024, which was inevitably hindered by the COVID-19 pandemic. However, since the easing of restrictions, the construction industry has been able to resume starting new projects. As a result, we’re seeing encouraging growth in the amount of newly built homes.

According to government figures, in the first three months of 2021, nearly 50,000 homes were completed. This was not only an impressive feat in the context of last year, but it was also the highest figure in 20 years.

Will it be enough for incoming demand?

Whilst construction of new homes is at a 20-year high, there is still the issue of rising demand for home ownership. This has been fuelled by recent schemes to help people own their own home, including the introduction of the 95% mortgage guarantee scheme earlier this year, which will mean more demand from first-time buyers, potentially without enough supply.

The question remains whether the housing targets will be enough to provide housing for the people looking to get onto the property ladder or move houses.

Reflecting on home ownership in 2021 and beyond

Buying your own home is becoming more of a reality for many people. For those looking to buy a property, whether you’re a first time buyer or not, there are several schemes available to support home buyers in purchasing their own property.

Government support and bonuses on savings can make the difference when hitting a savings target for deposits. There is, however, more competition with the lack of supply for the amount of demand that there is for properties in the UK. Because of this, we’ve seen increases in the prices of homes, which home buyers will have no choice but to adapt to.

Of course, there is always scope for change, and as we’ve seen with the housing market’s fluctuations in response to the COVID-19 pandemic, we expect to see more shifts as we move into a post-pandemic market.