The chancellor took to the stage again this week to reassure the country and investors at large that the government and international community had things under control and despite estate agents, banks and other property industry operatives taking a short term break, things appear to be holding well ready for a return to normal.
It’s been suggested already that with some of Europe’s worst hit nations planning their exit strategies that we could see some lifting of restrictions and a return to some form of normality within the next 6 weeks.
Spain has seen construction workers return to work, whilst Austria has announced its plan to re-open some retail stores in a staggered approach to lifting the restrictions that have put the economy on ice for the majority of the past month.
Whilst it hasn’t been suggested that the UK will follow the same trajectory, it appears widely expected that we will take a similar approach but slightly behind the timeline announced by these countries moving forward.
In a reassuring sign that the treasury’s approach is having a positive effect across the property market. The BBC reported that 1.2 million homeowners have agreed a 3-month mortgage break with their lenders since the measures were announced.
There is also a broad expectation that this option will be taken up by many more, and the announcement has been received warmly from business and consumers.
With property prices holding steady and investment even seen to be increasing in some areas, an optimistic but not unrealistic view is that this will simply be a cooling period for the market whilst the fundamentals wait to return to normal.
Unlike retail and other areas of the economy that can be volatile, property has by and large maintained a confident resilience, and this holds up in much of the data filtering through.
With a large amount of property sales and completions waiting to go ahead, it feels unlikely that a sustained lockdown will do much more than hold things level until restrictions are lifted.
As reported in City A.M, Russell Galley, Managing Director, Halifax, said: “The UK housing market began March with similar trends to previous months. Key market indicators showed a sustained level of buyer and seller activity. “Overall average house prices in the month were little changed from February’s record high, while annual growth nudged up to 3 per cent.”
It’s not possible to say for certain what’s likely to happen through to the end of year as we’ve not really been in this position before, and confident predictions of absolute outcomes are suspect.
What we can do is make broader predictions based on the information available, and given that the property market as a whole was on very steady ground, it feels unlikely that things will suddenly hit a free-fall without any prior indicator.
More likely, given that confidence in the market was strong, things will take a break for now with investors, buyers and landlords taking the time to re-evaluate portfolios or bide time, with a slow but steady return to normality as the summer progresses.
For those that are more in the know, however, activity in property investment appears to be continuing uninterrupted, and many are actually increasing portfolios whilst things remain quiet.
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