As the UK housing market slowly unfurls back into action following the latest Government advice for certain businesses, industry professionals have warned that rebooting the market won’t be a quick process. We take a look at what people across the industry are predicting for the future of this industry in a post-lockdown world.
Quick recovery for the construction industry
In terms of building new homes, before Covid-19 struck the Government target stood at 300,000 new homes built for the year. Clearly, this target didn’t take into account a world pandemic, but it is anticipated that the residential construction market will quickly get back on its feet, Already, many construction workers have returned to work under the Government’s updated guidance. With this being said, while larger companies have the funds available to ride out these times, a lot of smaller construction companies have struggled, and some have had to permanently cease trading.
Jennet Siebrits, head of residential research at CBRE said: ‘We expect the residential property market to bounce back in the aftermath of the crisis, but the timings and extent of the downturn will depend largely on the wider economic impact.’
Over the course of the months leading up to the pandemic, the Government consistently reiterated the message that housing, construction and infrastructure will be high on their list of priorities. Despite the major roadblock that the current situation has presented to the industry, demand for new houses is still anticipated to remain high amongst investment property buyers.
Rising house prices
Unfortunately for those hoping to get on the housing market, the aftermath of the pandemic could potentially lead to a significant increase in house prices. This means that those who do not have the funds for large deposits could find themselves forced to rent or house share longer than they had planned. This, coinciding with those struggling to get back to work in the coming months, could see a significant dip in residential house sales in the short term.
Simon Rubinsohn, RICS Chief Economist believes that, “it will not simply be a case of returning to where the industry was prior to the onset of Covid-19.”
“Partly this reflects uncertainty about the likely state of the economy at this point and how this will impact on development, but it’s also indicative of the challenge the sector is currently under as it attempts to access government funding to keep heads above water.”
Rise of the buy-to-let industry
As many people may be looking to delay their step into the housing market, this could prove beneficial for property owners and landlords in the buy-to-let industry. Before COVID-19, buy-to-let landlords had been hit by a series of regulatory changes over the last few years which have greatly affected their trade. It’s impossible to say what will happen at this stage but in order to support the economy and ensure homes are available to those not on the property ladder, changes could be in order.
Taking things digital
As workforces around the world are being forced to quickly adapt to digital ways of working, the property market is doing the same which has seen a rise of virtual property viewings and online valuations. It’s hoped by many that these practices can be continued and developed post-lockdown in order to streamline the process of both buying and letting properties. With that in mind, it doesn’t appear that physical viewings will decrease in popularity.
It seems that virtual viewings can act more as a tool for potential buyers or renters to view a property before booking a physical viewing. This could save estate agents a lot of time which can be utilised in other areas.
The real star of the show is looking to be online surveyors’ mortgage valuations. While at present some of these can be done virtually, if the technology is developed to sustain and improve this process, this could be a real gamechanger for the industry and provide valuable long-term benefits.
Do you have any questions surrounding your current property insurance? Perhaps you were leasing a commercial building which is now unoccupied, or you’re struggling to find tenants for your student let. For any concerns or queries, just call The Insurance Centre on 01524 848506.
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