As with so many industries both across the country and the world, the COVID-19 pandemic has had a considerable impact on the property market. Whilst the UK lockdown has somewhat eased, with social distancing practices and the current measures still in place, it’s become a challenge for the property industry to operate effectively.
With the market now beginning to start back up, many looking to move or sell their homes are wondering, how will COVID-19 affect house prices?
Whether looking to buy your first home or move to a new one, we explore how the post-pandemic property prices could affect you.
Will there be a price crash?
COVID-19 has caused major disruptions to industries everywhere, significantly reducing demands for goods and services.
Experts have predicted steep reductions in property values during this difficult time, some stating the average house price could see a reduction in value of over £30,000. Senior CEBR economist Alastair Neame commented the following on the matter:
“Those most at risk of unemployment tend to be young people living in the rental sector.”
“If they lose their jobs and can’t afford to pay their rent this could have a knock-on effect on landlords who could be forced to cash in.”
Whilst many are predicting considerable impacts to property prices, there are others in the field who have predicted smaller reductions, dependent on how the economy is hit from the pandemic.
Economists have predicted the future of this downturn to look less like previous financial crisis (e.g. 2007), and further to rebound quickly as the world begins to recover from the pandemic.
The CEBR claim that some regions will experience bigger falls in house prices than others, due to the fact that job and income losses will be uneven throughout the country. Below is a table with the CEBR’s regional house price changes for 2020:
|North East||– 13.50%|
|North West||– 16.00%|
|Yorkshire and the Humber||– 16.50%|
|East Midlands||– 12.50%|
|West Midlands||– 16.00%|
|East of England||– 16.25%|
|South East||– 11.00%|
|South West||– 13.00%|
|Northern Ireland||– 16.50%|
Whilst these figures show a significant price drop for properties across the country, there are some in the property industry with slightly differing predictions, Knight Frank’s Tom Bill stating:
“We don’t expect a huge amount of differentiation in house price changes between the regions. If there are hotspots of unemployment, this might have an impact, but beyond that you will have to look at the relative performance of house prices in recent years.”
“We expect London house prices to recover more quickly than the rest of the country. This is because you have a broader range of international demands and some buyers who are going to benefit from the low value of the pound.”
Chris Griggs of Griggs Homes commented: “Since the easing of lockdown restrictions and the ‘reopening’ of the property market we have seen a surge in interest and enquiries across all of our developments.”
“Whilst families have spent a number of weeks cooped up in their homes it has given them plenty of time to consider their requirements and buyers are now placing extra importance on outside space and the ability to have a home study/work area.”