How Will Coronavirus Affect the UK Housing Market?

Do Home Buyers Prefer Renovation Or Perfection?

Unprecedented times are calling for unprecedented measures and the housing market is another sector of the economy that has been hit hard by the effects of COVID-19. We understand that many of you will have concerns about your housing situation including how to move during lockdown, what to do if you’re in the middle of selling and/or buying a house and more. Today, we aim to answer all of your common questions and shed some light on the current situation and future of the UK housing market amidst these difficult times.

If we take a look back at last year, December’s election provided some much needed stability for the housing market causing sales to rise by 12% in January. Fast-forward to April of this year and housing experts such as Zoopla and Knight Frank are both predicting massive falls in the second quarter of this year compared to last.

From their most recent research Zoopla suggests housing sales could fall by more than 60%. However, it is not all doom and gloom and we have to be careful not to take these statistics to heart. In March, Nationwide found that house prices increased by £3,000 and Halifax found that prices had increased by 3% but of course, these figures do not take into account the government’s lockdown period. Knight Frank forecast a similar trend to that of Zoopla but suggested that house prices will bounce back by 5% in 2021.

Will the housing market reflect the crash of 2008?

As estate agents shut up shop during lockdown and government advice meaning more and more people are staying indoors, there is no doubt that the housing market will follow suit like the rest of the economy.

As people postpone moving and deals it is certain that the market will stagnate due to the practicalities of less deals going through. Although, it must be stressed that this dip in the market cannot be compared to the financial hardship of 2008. Government assistance with the economy this time round poses some positivity for the near future.

The housing market is effectively frozen. There will be limited impact on prices and the rebound will depend on when lockdown restrictions are lifted, general public mood and to what extent businesses will be able to return to business as usual.

Can I still move house during lockdown?

In short, yes but only if absolutely necessary. The government has been very clear on its advice to those wishing to move house; it is encouraging sellers and buyers to hold off unless a property is vacant or if you are bound to a sale and cannot agree to postpone.

If contracts haven’t been exchanged, buyers and sellers have been encouraged to put these on hold but there is understanding if the deal is too far down the line. If a move is absolutely critical then people must observe social distancing rules. If someone involved in the move is self-isolating due to showing coronavirus symptoms then both parties should try and reach an amicable agreement to postpone the moving date.

You may be worried that you will be at risk of breaking your contract if you postpone your moving date but this is where it is important, more so than ever, to contact your conveyancer. Despite a legal commitment already having been made via a contract, you may be able to alter the contract terms if both parties agree. Adding a clause to delay the move is perfectly possible and will save both sides unwarranted stress and anxiety.

We are living in times like no other. Each day brings another level of uncertainty but be sure to reach out to those who can help and advise you so that you stay safe and informed during this unusual time.

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