The pandemic forced many of us into stay-at-home lifestyles, which made people discontented with their existing properties and keen to move to a bigger and better place.
Crucially, many middle-class professionals can afford to turn those desires into reality, having hung on to their jobs and racked up large sums in lockdown savings.
On top of that, there is a large element of pent-up demand because the market was shut during the first lockdown in the spring. Buyers rushed back in the minute it re-opened.
COVID-19 has caused more damage to the UK economy than any other crisis in living memory, yet the housing market is booming. So why is this happening and equally important, can it continue?
Add into the mix Chancellor Rishi Sunak’s stamp duty holiday and interest rates at near to zero – the main Bank of England rate was slashed to 0.1 per cent in response to the virus – and you have a recipe for a surge in house prices.
The detailed picture is intriguing. Surprisingly, at least for those commentators forecasting an exodus from London in favour of working from home from a bucolic idyll, prices in the capital have soared to a record high.
Increases in some exclusive enclaves such as Kensington and Chelsea, where a townhouse will cost you nearly 30 per cent more than a year ago, are driven by special circumstances.
These include the flight to the UK of wealthy individuals from Hong Kong, along with the rush among rich international buyers to beat a new additional rate of stamp duty which is due to be slapped on non-UK residents from April.
Add into the mix Chancellor Rishi Sunak’s stamp duty holiday and interest rates at near to zero – the main Bank of England rate was slashed to 0.1 per cent in response to the virus – and you have a recipe for a surge in house prices
But the robust performance in more ordinary boroughs suggests that so long as power and influence are concentrated in London, it will remain a honeypot for the ambitious and talented.
So much for predictions the capital will morph into a ghost town, hollowed out by Covid.
Some analysts argue rises of this order are unsustainable and that we are riding for a fall. The economy in their view is being artificially propped up by government support.
When the furlough scheme ends, unemployment will shoot up, launching a torpedo at property prices. There are also fears the end of the stamp duty holiday could hit values.
Increases in some exclusive enclaves such as Kensington and Chelsea, where a townhouse will cost you nearly 30 per cent more than a year ago, are driven by special circumstances
The EY Item Club, which bases its forecasting on Treasury models, is predicting a 5 per cent fall by the end of this year, as does respected think tank the Centre for Economic and Business Research.
But if the vaccine roll-out is successful and the economy is brought out of the deep-freeze, the market may well prove the pessimists wrong, as it has consistently over the last 30 years.
Mortgages are likely to remain affordable and interest rates are not expected to be hiked any time soon – indeed, they may even fall further.
And, with returns on savings virtually non-existent, for many property will continue to look like an attractive investment.
Rising house prices are a mixed blessing because they make it harder for young people to put a foot on the ladder.
But taken in the round, it is a very good thing indeed that the property market, the bedrock of the UK economy, has proved so resilient – and the Chancellor should extend the stamp duty holiday to help keep it that way.