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How will Coronavirus affect the property market?

Written by: Category: News April 2, 2020

While it is essential to know where our priorities lie at the moment, there are many other aspects of life which people want to remain informed. Professionals in the property industry will be interested in how the market deals with Coronavirus, but virtually every individual is connected to the housing market in some way. Therefore, there is a considerable level of interest in knowing how will Coronavirus will affect the property market. At VitalSpace, we aim to keep you informed as best as we can.

How was the UK housing market performing before the impact of Coronavirus?

It is fair to say there was a considerable level of optimism surrounding the property market at the start of 2020. There was a 12% increase in sales for January of this year, and many leading industry experts predicted consistently strong transaction numbers for the year. Understandably, this changed; and the same industry experts who were bullish about the market are now raising concerns. Leading property websites have said the number of property transactions in the next quarter could be 60% less than the same quarter of 2019 and also stated that in the week leading up to 22nd March, buyer demand fell by 40%. People don’t want to buy houses right now, vendors don’t want viewers, and the Government has recommended the market stops operating as usual.

Will Coronavirus affect house prices?

At this point, no one can say with any certainty what impact Coronavirus will have on house prices. In the short-term, and given it is reasonable to assume there will be a reduction in the number of transactions will take place, house price growth will stagnate.

Uncertainty hampers the property market, but there is enough evidence to suggest the housing market is robust and likely to bounce back. The political uncertainty in the country hampered the property market, but the optimism and positivity at the start of 2020 indicate that the market can return from trying times.

Richard Donnell, from Zoopla, said; “The impact of external shocks [such as COVID-19] is to reduce consumer confidence, and put a brake on housing demand and the number of people moving home. We do not expect any immediate impact on prices. Beyond the next few months, the outlook largely depends on how the government’s package of support for businesses and households reduces the scale of the economic impact.”

Concerning how the market will be affected in the longer-term, a lot depends on the measures which are introduced in everyday life. Right now, there is no way of knowing what daily life will be like, and this is reflected in the uncertainty surrounding the housing market. Richard Donnell also said; “The timing of any rebound in housing market activity depends on when the new restrictions are lifted and to what extent households and businesses can return to a normal way of life.”

We know people have questions, and at VitalSpace, we are here to assist you. We operate within recommended Government guidelines, but our team are still in a position to offer guidance and support whilst working from home. If you have any questions or queries about the housing market during the Coronavirus, please contact us today on 0161 747 7807.

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