Why you shouldn’t look to 2008 for housing market cues
It’s vital that we clarify there is a huge lack of similarities between today and the 2008 financial crisis, for example, there has been no investor shock in these times
On March 26, the government suspended the UK’s housing market for nine weeks. Now, ten weeks later and with restrictions on the property market now eased, the question on everyone’s mind is: “How does the landscape look now?”
Understandably, all eyes are focused on London to understand what might happen next. Despite ongoing travel restrictions, international buyers are more active than expected and the fall through of deals is reassuringly limited.
There is an adjustment going on, combined with the market beginning to gain momentum once more. London really is beginning to find its feet.
During the first few days of lockdown, we forecast that prices in London would fall by 5 per cent. What has become apparent, a full month into trading, is that much of this projected decline has already been priced in.
Early sales indicators are encouraging too. Applicants and viewing numbers are up, and instructions are slowly increasing.
Supply has also started to catch up with demand in the UK housing market as the scale of pent-up demand encourages more owners to sell.
The number of new prospective buyers registering in the capital was 34 per cent above the five-year average, and outside London, new registrations reached their highest total in more than nine years last week.
Meanwhile, the number of new instructions to sell in the first fortnight of June outside the capital was 16 per cent higher than the five-year average.
Many housing market experts are confident that the impact of the pandemic on the UK’s property market will be short-term. Unlike the Global Financial Crisis (GFC), the government was fast to step in with an unprecedented support package for companies up and down the country.
This has allowed property firms to retain the best talent, ultimately benefiting customers and clients.