How Will the Coronavirus Pandemic Affect UK’s Housing Market?
Arslan Butt • 1 min read
A recent study by global consultancy Knight Frank reveals that house prices across the UK could crash because of the impact of the coronavirus pandemic on the country’s property market. The number of house sales in the UK could see a steep decline from around 1.175 million in 2019 to around 734k in 2020.
What’s even more worrying is that, according to the report, the “lost”sales opportunities from this year are not expected to be delayed into next year. On a positive note, however, Knight Frank estimates house prices in the UK to decline by 3% this year and then rebound higher by 5% in 2021.
Meanwhile, rents for prime property in central London could remain flat through the year and climb 3% higher next year. After recording strong performance during the first couple of months of 2020, the housing market in the UK is forecast to remain strained as the market focus shifts from Brexit related uncertainties to those caused by the coronavirus.
The house price estimates are based on estimates that the UK GDP could contract by 4% in 2020 and witness an increase by 4.5% into next year as economic activity recovers after the ongoing coronavirus pandemic. According to the global head of research at Knight Frank, Liam Bailey, “We [now] have to expect weaker economic activity in the first half of 2020, the dislocation in the jobs market and weakened consumer sentiment will impact on prices – however, the relatively finite timespan of the crisis means declines will be limited.”