The financial uncertainties of the self-employed in the property industry have been, and remain, a problem during the current crisis.
Property sales are currently at a halt, developments are currently paused and construction has stopped, with some only just starting to return to work. It’s safe to say that COVID-19 has affected the property industry at all stages, from development through to completion. This is how the property market is expected to look once the pandemic is over and things start to return to normal:
Savills reported that construction had been paused on sites that has the capacity to build 79% of the total housing supply. This will therefore lead to a huge drop of houses that come to the market in the next year.
CBRE has also told Financial Times that private developments in London could decrease by half if sites are closed until July. This will mean that the output would be just 10,000 delivered in 2020, rather than 22,000, the average five-year figure.
There have been many predictions about the property market, with many thinking it will go into a deep freeze. Knight Frank has forecasted that property sales in the UK will go from 1,175,000 last year, to just 732,000 in 2020.
There are also expected to be 350,000 fewer mortgage approvals in both England and Wales, including 150,000 less first-time buyers.
Chris Evans, Head of Specialist Mortgages at Pure Commercial Finance says:
“Lenders may be more reluctant to release their 95% LTV products, and as it stands, most lenders are only offering products that require larger deposits. Also, some lenders will choose to ignore overtime and bonuses when it comes to assessing their income until things die down, both of which will of course make it harder for first-time buyers to access a mortgage.”
Of course, these are all predictions, and nobody truly knows how the property market will look once the pandemic is over. However, it is safe to say the market is one of those that has been hit hard and has affected all developers, tradesmen and investors in the market.