With much of the country beginning to go back to work and life gradually easing into the ‘new normal’, you’d be forgiven for thinking we’ve perhaps seen the worst of the COVID-19 pandemic. The same could be said for the housing industry in the UK – with estate agents once again open and sales going through it stands to reason that we will see a continuing degree of recovery in the housing market over the coming weeks and months.
But have we truly seen the effects of the pandemic yet, or is more disruption to come?
Quite aside from the potential of a ‘second wave’ of the virus towards the end of the year and the implications that will have on the country as a whole, new reports out this month indicate that perhaps we’re only just starting to see the true effects of the pandemic and subsequent lockdown three months later.
This month, the UK recorded it’s first annual house price decrease since December, and while it was only a small decrease at 0.1% year-on-year, it is still indicative of the detrimental effects that the pandemic has had on the economy. Mortgage approvals have also taken a hit this month, with figures released at the end of May showing an 86% decrease compared to May 2019, with just 9,300 recorded.
Robert Gardner, chief economist at Nationwide says, “the medium term outlook for the housing market remains highly uncertain. Much will depend on the performance of the wider economy, which will in turn be determined by how the pandemic and restrictions on activity evolve (including any behavioural shifts).”
London Mayor Sadiq Khan warns of potential problems in the near future for the rental market too. With the tenant eviction ban due to come to an end in August, there is a fear that many will lose their homes due to rental arrears accrued due to COVID-19. With many losing their jobs due to the pandemic, the potential for housing associations to become overwhelmed with tenants needing social housing is a very real possibility.
Unfortunately it seems as though the uncertainty is only going to continue in the near future as the country and indeed the world as a whole recovers from the ongoing effects of the pandemic. At this point we can only speculate over second waves and the ongoing implications the pandemic will have on the housing market, but we must remain hopeful that we see recovery in the figures over the coming months.
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