Will Lockdown 2 Impact House Prices?

19th November 2020 posted in SELLERS LANDLORDS BUYERS

From Thursday 5th of November until Wednesday 2nd of December, national restrictions are in place, effectively returning the country to lockdown.

The key instructions are:

1.       Stay at home, except for specific purposes.

2.       Avoid meeting people you do not live with, except for specific purposes.

3.       Close certain businesses and venues.

The property market has previously experienced a lockdown, with minimal activity taking place between March and July of this year. For the second lockdown period, it appears as though the housing market will continue to operate as normally as possible.

The housing market has been approved to stay open

The Housing Secretary, Robert Jenrick has made it clear that “the housing market will remain open throughout this period. Everyone should continue to play their part in reducing the spread of the virus by following the current guidance.” The Housing Secretary has also said in respect of agents and people moving; “They will need to follow social distancing guidance that has already been published.”

As always, we advise people to stay in touch with the latest Government guidelines on moving home, which can be found online here.

People want to know how the lockdown will affect the housing market

Richard Donnell, the Director of Research and Insight at Zoopla, was asked about the impact Lockdown 2 will have on house prices.

He replied; “It won’t have a significant impact on house prices because the housing market is still open for business. Headline house price growth will continue to rise towards 4% by the end of the year. However, it’s important to remember that there is significant regional variation. Everyone’s homes sit in different housing markets, and what happens to values reflects local supply and demand, as our House Price Index shows.”

The housing market responded well to the first lockdown

Richard was also asked about how the housing market responded after the initial lockdown. The house price growth reached 2%, and the sales pipeline is at least 50% bigger than it was at this time in 2019. Naturally, buyers and vendors are keen to know if this is sustainable, particularly in light of the new challenges.

Richard said; “The post-lockdown surge in demand is almost unprecedented. And that’s because there are three cohorts of buyers in the housing market that you wouldn’t normally have. The first is buyers who were forced to put their moving plans on hold when the housing market was shut down as a result of the pandemic. The second is buyers who have been spurred on by a once-in-a-lifetime re-evaluation of their homes. And the third is buyers who want to take advantage of the stamp duty holiday.”

In summing up on this topic, Richard appears optimistic yet realistic, saying; “This sheer volume of buyers can’t be sustained for a prolonged period of time. So it’s unsurprising that demand has slowed since the summer and has now returned to pre-Covid-19 levels. However, it’s important to put this into content – appetite is still more than 40% higher than a year ago.”

In line with Government guidelines, our Baldock Branch is operating and our experienced team is working hard to support you.  To clients old and new, if you have any queries or need advice on property sales and lettings then please call 01462 895061 or 01462 742077, or you could email baldock@country-properties.co.uk  or ashwell@country-properties.co.uk