The property market looked like it was bouncing back in 2020, but could the outbreak of coronavirus have the potential to derail this recovery?
While house prices continued to grow last year, Brexit uncertainty and the General Election caused the housing market to limp along at a sluggish rate. However, this year has seen the property market bounce back.
Last week, Halifax released its house price index for February. It showed that prices had risen month on month, by 0.3 per cent to a record average property price of £240,677. Overall, this suggests an annual increase in house prices of 2.8 per cent.
‘The UK housing market has remained steady heading into early spring,’ said Russell Galley, managing director of Halifax, commenting on the report. ‘The sustained level of buyer and seller activity is strong compared to recent years. With positive employment conditions and a competitive mortgage market continuing to support demand.’
However, looking ahead, he warned that this recovery could be at the mercy of coronavirus.
Coronavirus impact on the housing market
‘Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continues to exert pressure on the economy,’ he explained. ‘We wait to see how these will affect housing market sentiment later in the year.’
The impact of coronavirus has already been felt on the stock market. Monday saw global stock markets post the biggest falls since the 2008 financial crisis. Could it have a similar impact on the housing market?
Rather than panicking and pausing your house hunt or sale, the HomeOwners Alliance has advised people to stay calm, and carry on.
‘Although there is a great deal of pent-up demand from those wanting to move, no one can predict what the longer-term implications of the coronavirus will be on the housing market,’ says Paula Higgins, CEO of HomeOwners Alliance.
Speaking to Ideal Home exclusively, Paula adds, ‘the housing market, like all markets are influenced by sentiment and people are feeling nervous at this time. We have had homeowners getting in touch this week wondering whether to pause their house sales. Worrying about the practical impact of self-isolation. And with concerns about using their investments as a home buying deposit, given what happened to the stock market on Monday.’
‘There will no doubt be people pausing the house buying and selling activity over the next couple of weeks, as the UK reaches the peak of the epidemic,’ she adds. ‘But don’t do anything you might regret – like pulling out of a house purchase.
‘Government advice is that we are in a containment phase in the UK, so keep calm, wash your hands often and carry on.’
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