England’s housing market is open but under pressure. A second lockdown is here but what does this mean for house prices.
Here we go again. Except this time, it’s different. The Government has said that the housing market will remain open during the second lockdown in England.
Buyers, sellers and agents must follow social distancing rules, which include wearing PPE and to have as few people looking at the property as possible.
In the first lockdown, from March to May, all but essential moves were banned and buyers were urged to postpone their purchases. As a result, around 450,000 moves were frozen.
Property viewings are currently banned in Wales for the two-week “circuit-breaker” lockdown, but home moves are allowed, and the restrictions are due to lift on November 9. The housing market is also still open in Northern Ireland and Scotland.
The bigger question is what will happen to house prices. On one hand, lockdown and the rise of working from home have in themselves become factors driving a surge in house moves. Mortgage holidays and the furlough scheme have been extended, which means that the housing market will continue to be insulated from the financial impact of the pandemic – few homeowners will be forced to sell for now.
But the new restrictions will put further time pressure on the market. Lenders will have to re-divert resources to managing requests for payment deferrals, working from home means logistical steps such as local authority searches could be further delayed, and buyers who want to relocate may be unable to travel.
As we edge closer to the March 31st cut-off for the stamp duty holiday, these problems become increasingly ominous. If buyers miss the deadline for the tax break, they will lose out on savings worth up to £15,000. Their purchasing power will then be significantly reduced. Others may no longer be able to afford to move at all.
By then, there will likely be no pent-up demand left to carry sales. The market may well have to face up to the full economic shock of coronavirus and widespread unemployment.
Love Your Postcode are following the strict COVID guidelines set out by the Government in order to stay open.
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