There is one thing that we can say in the wake of the Coronavirus pandemic, and that’s that we don’t know what the world will look like once the virus has gone – if that ever happens. At the beginning of 2020, the property market was at a high. The housing market was off to the strongest start since 2016, and then Coronavirus arrived, and the growth that was predicted was abruptly halted.
The cost of house prices experienced the most significant drop since early 2009, and last month, the Nationwide house price index showed that property in the UK fell by almost 2%. With lockdowns in place and measures to slow the spread of Coronavirus implemented, the activity in the housing market has screeched to a stop. As the measures are beginning to lift, Rightmove recorded its busiest day in early June, as the demand for housing burst the banks. However, there could be a further decline on the horizon with the UK economy in unknown waters.
In the medium term, the outlook for the housing market for the remainder of 2020 is very uncertain. Given that the property market is affected by the wider economy, there is a chance that there won’t be too much in the way of recovery until the early months of 2021. There are still those who are optimistic about the housing market, such as estate agents. Given that there is still a need among buyers for homes, the assumption is that lockdown is the barrier to home purchases. The thing is, people have lost work or downgraded in their roles, which means that the priorities of the buyers have changed. Some people are not looking at needing an outdoor space any longer, which means that flat prices may not recover as quickly as house prices.
Will we see a Bounce Back?
The property market experiencing a “bounce back” all depends on how the rest of the economy recovers, and that then depends on consumer behaviour. Think tanks have predicted that the housing market will have an average price fall of around 13% by the end of the year, but this figure will depend on where people are around the country. Mortgage lenders had initially reported an increase in house prices by 2.8%, but Coronavirus would be a bump in the road for many buyers. March had already seen an impact on the cost of property due to Coronavirus, but it still feels positive out there. It’s too early, it seems, to assess the long-term impact of the lockdowns on the UK housing market.
Estate agents are also remaining optimistic, despite the number of listings being made available grounding to a halt. The upswing here is that the halt is not due to the finances, but due to the Government enforcing lockdowns. It comes down to the fact that right now, buyers cannot buy a house and listing homes has slowed right down. As more and more lockdown measures are lifted, the expectation is that the housing market will improve. However, we cannot know it, and we are all waiting and seeing with caution!