Coronavirus and the UK Property Market: Property Prices and Transactions
There is no doubt the coronavirus has impacted all parts of the UK economy. With the original outbreak in China announced just after Christmas, the world has come a long way with over 1/3 of the global population under lockdown at the same point.
For the UK housing market, the timing of this outbreak is significant. After several years of slow growth rate in UK property prices, the start of 2020 had provided homeowners and investors with a relative sense of optimism after a post-election bounce. However, with the outbreak of the coronavirus, the positive impacts of this post-election bounce have faded with the introduction of social distancing measures across the country.
With property experts questioning the possible impacts of Covid-19 on the UK housing market, here at NEPI, we wanted to provide you with some insights into what the impacts may be for property in the North East.
The Wider Picture
It would be correct to say optimism, did return to the UK property market in 2020, following an increased sense of security post the December 2019 general election. However, as expected the property market is experiencing the slowdown that comes naturally with such a situation. The measures introduced by the government to mitigate the spread of the virus caused non-essential businesses, including estate agents to close and the government’s social distancing advice effectively put any move or transaction on hold.
Whilst it is almost too early to predict what the long-term impact of this outbreak will be on the wider property market as lockdown measures are still in place, the research provided by Zoopla predicts that house sales will fall by around 60% in the second quarter of this year in comparison to the same period in 2020. This comes with buyer demanding significantly dropping as the lockdown continues to be in place. The ultimate full in sales will be determined by how long lockdown measures will be kept for.
It is important to note, while, April will show some activity from property sales that were already in process before the lockdown was in place or could not be delayed. Experts predict the heart of the slowdown will likely occur in May and June.
With the rebound of the property market in the first months of the year, the nationwide estate agent Savills had expected to house prices to rise throughout the year, however as expected this rise has been revised. While house price growth will naturally stagnate, experts predict no dramatic decrease in house prices in the short-term.
In the uncertain climate that we are currently witnessing, it is hard to accurately predict how house prices will react if restrictions remain for longer than expected. To provide an element of a ‘silver lining’, the government job and wage protection should protect the demand in housing once restrictions are lifted.
What does this mean for North East Property?
Included in the government measures to mitigate the impact of the coronavirus on local communities in the North East, both socially and economically, have been aided with £130 million (in total) grant provided to local authorities across the region.
It is simply too early to provide a definitive answer to what the impact on the property market in the North East will be. It is predicted to follow in a similar trend throughout most of the UK – with significantly decreased market activity.
What we do know from data provided by The Property Activity Index archives showed, a decreased of -21.3% in new properties listing and ‘sold’ properties decreasing by 16%. While these figures may seem troubling, without the coronavirus, the North East would be continuing in following the year on year increase trend that has been witnessed.
How can NEPI help?
Here at NEPI, we appreciate these are testing and confusing times for the UK/ North East Property market. Whilst the market may be in a sense of ‘lockdown’, the expert team we are lucky to have here at NEPI will be more than happy to help you with any questions and queries you may have.
Whilst the length of the restrictions on the property market are not fully known, we are here to help ensure you and your property needs are looked after during these times. If you are looking for more information on what we do here at NEPI, you can contact us here, or you can visit our North East properties page to see what properties are available in your area.
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