Analysis of coronavirus’ impact on the UK property market by Knight Frank has shown that although property prices may dip by 3% this year, they will rebound in 2021.
In order to prevent a house price crash, the UK government has essentially paused the UK’s most powerful market. According to global consultancy Knight Frank, house sales will deplete this year as the pandemic puts the UK property market into a deep freeze, with prices falling by 3% and rebounding next year.
In Knight Frank’s initial assessment of the market, they predicted that the number of house sales in the UK would dip from 1,175,000 last year to just 734,000 in 2020. However, the consultancy is not predicting a housing price collapse, but predict a 5% rise in house prices in 2021.
Global head of research at Knight Frank, Liam Bailey, said: “The housing market was in a strong position in January and February. A sharp uptick in sales and price growth was seen across the UK, with even the prime central London market seeing a reversal of a five-year-long price decline.
“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.”
The property market freeze is certainly upsetting for anyone hoping to buy or sell their home in the early part of 2020, causing a delay in plans. However, there is every reason to believe that the housing market will pick up where it left off, depending on how well the economy weathers covid-19.
Whilst the property market freeze is not great for those buying and selling homes, it does provide opportunities for foreign nationals to invest in the UK property market. The global economy is under a large amount of strain due to the coronavirus pandemic and interest rates have hit an all-time low. The pound has dropped against the dollar and other major currencies, making property investment an attractive option for overseas investors looking at the UK buy to let market.
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