While news that the UK is in a recession has been depressing, there are many property market experts who are viewing this announcement in a philosophical manner.
Canaccord Genuity analyst Aynsley Lammin considered the announce and said that it should “not come as a surprise to anybody given huge sections, including the housing market, were shut down for most of Q2”.
There are many external factors shaping the property market right now, and in the next few months. The stamp duty holiday is a key issue, and how the Help To Buy scheme will be altered in Spring is another issue that will have a big influence on how and when people buy.
The market must overcome a lot of challenges
There is also the fact that the market must brace itself for a rise in unemployment figures. It has been pleasing to see a lot of activity in the property market since mid-May when the market re-opened, but there have been many reasons for this positivity and energy. Going forward, there will be additional challenges to overcome.
Charlie Bryant is the Chief Executive of Zoopla, and he spoke about the current state of the economy and the housing market. Charlie says; “The characteristics of this recession are markedly different from those of 2008/09. The housing market recovered rapidly when agents reopened back in May, and has continued to strengthen since that time and is currently holding steady at levels above those since at the start of the year pre-lockdown, which were already the highest we had experienced in the last four years.”
A balance needs to be found
The approach of optimism balanced with caution is also taken by Jennet Siebrits, the CBRE UK head of residential research.
Jennet said: “Following two months of inactivity, the housing market is showing signs of bouncing back, with a pick-up in mortgage approvals, sales and price growth. This resurgence reflects the release of pent-up demand of those buyers stymied by the Covid-19 lockdown. We expect this momentum to continue in the short-term, further boosted by the stamp duty holiday. However, over the medium term, prospects will depend on the wider economic recovery and in particular developments in the labour market.”
Another factor which has buoyed property market specialists regarding the London housing market right now is the increased attention of overseas buyers. It has been reported property investors from Hong Kong have turned their attention away from Singapore, and are now focusing on the UK market, with London the prime area for these overseas buyers.
Megan Wang is the Asia lead for Houzen, and she spoke about these buyers looking for London property. Megan said; “The main problem [Hong Kong investors] commonly face is one of trust and finding good deals. We believe independent international investors tend to not get the best deals since they don't have an established presence and hands-on knowledge of London’s market. Investors in Asia should also be able to participate in exciting high yield property opportunities in a safe environment, all while benefiting the local UK economy.”
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