The UK property market is slowly starting to open again after shutting down due to Coronavirus. Given the stringent lockdown measures in the UK, it’s no surprise that the property market has been adversely affected, but how has the UK property market changed during coronavirus, and what are its prospects for recovery? Let’s take a look at how coronavirus is affecting the UK property market.
The State Of The Market
What does coronavirus mean for the property market right now? The initial lockdown bought the UK property market to a virtual standstill. House viewings have been impossible until recently and they are now beginning to start again in a very different way with virtual viewings becoming the norm. However you slice it, the short-term outlook for the property market isn’t looking great right now.
How House Prices Are Changing
What will happen to property prices after the coronavirus? The property prices for the short term are expected to fall by around 3%. However, the short-term prices vs. prices for medium term or vs. prices for long term rentals are harder to predict and compare. The coronavirus recession is very different from previous economic downturns and we aren’t yet sure how the situation is going to evolve or resolve itself.
The 2008 financial crisis saw house prices crash. This was partly due to the unwillingness of banks to lend and restrictions on borrowing. However, in the current crisis, lenders are being encouraged to continue to lend money as much as they can in order to stimulate the economy. This could provide some protection for property prices.
What we are seeing, however, is lenders asking for larger deposits to protect their interests. In addition, the number of 90% LTV mortgage products has fallen dramatically, which will make it harder for first-time buyers.
House Prices In The Future
So, how will the coronavirus affect the UK property market going forward? No one can say for sure right now and there are different models being used to predict the market shift. However, most analysts agree that prices are likely to fall slightly this year, in line with the general economic depression expected in the UK, before potentially rebounding next year.
Coronavirus has made it difficult for landlords to find tenants for their vacant properties, making falling rental prices an inevitable consequence. This is a difficult time for landlords to invest in rental properties, as they are a much riskier prospect than usual.
However, rental prices will almost certainly rebound. Landlords looking to make longer-term investments might still want to consider investing in a rental property. Just remember that it might not be a profitable venture for a while. On the other hand, if property prices fall enough then landlords might be able to snap up a bargain on a property that they later turn into a rental property.
The current crisis is unprecedented. We have nothing in modern history to compare it to. As a result, there is still a huge amount of uncertainty about how this crisis will play out in the long-term and what the long-term prospects of the UK property market are. However, while the short-term prospects for the property and rental markets aren’t great, they are expected to recover relatively quickly.