Is The Housing Market The Key To UK’s Economic Recovery?

Changes To The Property Market Since Lockdown

An update on the state of the UK’s housing market and how it will impact the country’s economic recovery.

Pent-up demand during the UK’s strictest lockdown period has meant that buyers are flooding back to the property market in the hope of finding the property of their dreams. Although the industry has noted month on month property price falls since March, when lockdown began, there are plenty of signs that the market is recovering positively. June saw double the number of mortgage enquiries at Halifax bank in comparison to the previous month, whilst Zoopla has reported activity which is described as being ‘off-the-scale’. How will the property bounce back, and is this sector the key to the country’s overall economic recovery?

Rebound In Sales and Rentals

Following little activity during lockdown, Zoopla have now reported sales figures with an 137% increase since the start of June. The sale prices themselves are also looking particularly strong according to Halifax, who reports that typical UK property prices were 2.5% higher in June 2020, compared to the same month in 2019. Similarly, asking prices were 6% more in the first week of June this year, in comparison to the June last year.

However, it’s not just sales figures that are looking strong, as the rental market has also experienced a significant rebound since the property industry was allowed to reopen for business.

The number of completed tenancy contracts which were approved in June, were higher than the same month of 2019 for the majority of the month. Rental costs also increased by an average of 3% proving that the demand is still there in this sector. Activity is not just pronounced in the centre of the capital either, as an estate agents Collier Row team notes that London dwellers are increasingly interested in moving out to the home counties in a bid to find more space and value for money.

The Role of Students

Student accommodation plays a significant role in the UK’s property market and there’s good news for landlords, particularly for those who attract international students. 69% of those from overseas have no intention of altering their plans to study in the UK, as reported by the BBC. However, there is an overall reduction in the number of students taking up courses this September, with some academic institutions switching to predominantly remote based learning. This means that landlords are more likely to do well if they are able to offer accommodation in the vicinity of the UK’s most prestigious universities.

Increased Levels of Building

The prime minister, Boris Johnson, has set out his plans to boost levels of housebuilding with a view to benefitting the economy. From September, planning restrictions will be eased to allow property developers to proceed with their plans to work on unused buildings, either by adapting or demolishing them.

Unused commercial premises such as those found on brownfield sites should also be allowed to be transformed into residential homes. The prime minister hopes that by building in areas that have excellent transport links, the nation can benefit from renewed interest in some neglected areas.

There are plenty of reasons to feel optimistic about the future of the property market, and the pace at which these developments will occur are likely to help shape the overall economic recovery.