Earlier this year the UK property market forecast 2020 was looking up. With the resolution of Brexit in sight, experts predicted a ‘buoyant’ spring. Then Covid-19 happened.
We know how the rest of the story goes.
After three months of lockdown, and a pretty stagnant market, here in Torbay and the rest of the UK, normality is finally starting to return. Sanctions are slowly being lifted, and just in time for the summer barbecue’s we’ve all been craving!
If you wondered how will coronavirus affect property prices, then read on for the full analysis from Ridgewater Sales and Lettings, and learn how the housing market is starting to bounce back.
Open for business
Over the past few months we’ve all been honing our baking skills, Zooming left, right and centre and adapting to the ‘new normal’, as we await for the easing of lockdown. Then on 14 May, we heard the housing market news we’ve been waiting for – public house viewings could return, with new safety measures in place. These include restricted numbers of people attending viewings, no more ‘open-houses’, and for homeowners to vacate the property during viewings.
In a positive sign, on that day, Rightmove said that traffic to its property website returned to pre-lockdown figures with 5.2 million visitors – an uplift of 4 per cent on the previous year. In the subsequent week, a reported 11,000 new properties were listed for sale.
As many of us remain hopeful that the market will slowly regain momentum, we’re also aware that this will take time to return to pre-coronavirus levels.
Ultimately though, people need to move house for a whole host of reasons. Be it for relocating, expanding families, for work, or just for a change. This is particularly true of those aged 18 to 30 year’s old, who move on average three of four times during this age.
There’s another important factor, one you’re probably familiar with by now: remote working. Due to the coronavirus pandemic, 60 per cent of people are now working from home. As a result, we may see people looking to upsize to properties with home offices in the future.
Other studies suggest that 15 per cent of people are considering moving house due to life in lockdown. A further 34 per cent state that they feel differently about their home since Covid-19, such as the importance of a garden or the need for more space. So while the market may be slow in the short-term, there’s plenty of reasons to believe that long-term, it will bounce back.
Housing market coronavirus impact
It may be too soon to predict the impact of coronavirus on UK property prices, but the UK Land Registry figures are a useful indicator.
Although their data only runs until March 2020, it shows that the average house price in the UK was £231,855 at that time. It also reveals that property prices dropped by 0.2 per cent on the previous month. Although in good news, this had risen by 2.1 per cent compared to the previous year.
More recently, data from Nationwide, found that the average house prices dropped by 1.7 per cent in May compared to the previous month, with the latest average UK property price valued at £218,902.
But in keeping with the positive vibes, the housing market and our team at Ridgewater Sales and Lettings remains optimistic.
In their latest report, Robert Gardner, Nationwide’s Chief Economist, said that the policies put in place by the government to support the economy have helped limit damage. As we all know, these include furlough schemes and other financial support, which help to keep borrowing costs down.
In an encouraging statement, Robert Gardner said: “These same measures should also help ensure the impact on the housing market will ultimately be less than would normally be associated with an economic shock of this magnitude.”
The long-term outlook
As you’d expect, a snapshot of UK property prices right now shows the dent that coronavirus has made.
However, there are many reasons to be optimistic. As we know, things can change quickly, and once we return to the ‘new normal’, it’s expected for demand to return with property prices reflecting this.