What impact could coronavirus have on the housing market?

The property market had enjoyed a boost thanks to the outcome of the general election in December, but now the market faces uncertainty as the coronavirus pandemic continues.

Residential property prices increased for the fourth consecutive month in February as the market’s so-called "Boris bounce" pushed the average cost up to £312,625 according to Rightmove, but there are concerns that the surge could be dented by the coronavirus outbreak.

The property website reports that prices are up 3.5% year-on-year, thanks to a major rebound in the market since the Conservatives' election victory in December.

However, the coronavirus disease COVID-19, which has already caused a number of deaths in the UK, could pose a risk to this growth if it has an adverse impact on buyers’ confidence,

Colby Short, CEO at estate agency comparison website GetAgent.co.uk, said: “These are great numbers from Rightmove in respect of asking price highs and a significant reduction in the time taken to sell, particularly in the capital. But hold on, this is data collected only up until 7th March - and to say that a week is a long time in politics is nothing compared to a week where the CoronaVirus news cycle is concerned. 

“The year has started strongly for property and we all realise that the current crisis of health will be temporary, don’t we? But the question is, how temporary? And will a property market that had sprung from the doldrums of political paralysis weather a viral rival? I think so, but it will be challenging indeed for a while still.” 

There are growing signs that the disruption caused by coronavirus is spreading into the property industry, but London-based estate agency Benham & Reeves is urging buyers and sellers to “remain optimistic". 

Marc von Grundherr, director at Benham and Reeves, commented: “Covid-19 is of course a significant issue albeit that enquiry levels and viewings do seem to be holding up for now and we should remain optimistic, firstly for a swift resolution to the pandemic, followed by a robust response from the markets including property which is clearly well placed to withstand current uncertainty.”       

The impact this could have on the housing market is as yet unknown, as the length and continued coronavirus outbreak could cause yet more disruption.

Russell Galley, managing director at the Halifax, said: “The UK housing market has remained steady heading into early spring.

“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.”

But Galley acknowledged that it is a waiting game to ultimately see how the housing market will be impacted by coronavirus.

Tristan Batory | Associate 

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