The current coronavirus outbreak, or COVID-19 as it is officially known, has had little effect on housing sentiment so far, according to London-based estate agency Benham & Reeves.
Despite the number of UK cases rising to a new high of 163 at the time of writing, the housing market has continued to remain confident. Buyers and sellers are now breaking the habit of “wait-and-see” after having spent much of 2019 on the side-lines.
Demand for homes, particularly in the capital, continues to outstrip supply. Last month, Savills revealed that low stock levels were helping the prime property sector recover in late 2019.
Little sign of COVID-19 effect
Benham & Reeves revealed that only nine per cent of respondents who were in the process of buying or selling intended to put their plans on hold directly because of COVID-19. Furthermore, 69 per cent asserted that, even if COVID-19 becomes widespread, they wouldn’t allow it to disrupt any plans they had to buy or sell properties in the future.
Marc von Grundherr, director at Benham & Reeves, added: “Of course, there are still uncertainties that could impact house prices this year. Coronavirus is the most obvious. But we have just carried out our own research regarding the impact of coronavirus, and we discovered that 83 per cent of homebuyers and sellers are not planning to put on hold a house purchase or sale this year because of the virus.”
Mr von Grundherr explained: “After several years of uncertainty surrounding the London property market, homebuyers and sellers have already been adopting a ‘wait-and-see’ approach for some time, and now there are such ‘green shoots’ of confidence, most have no intention of delaying any longer.”
Virus cases rise as Government plans revealed
The UK Government has published extensive action plans in response to the rising number of COVID-19 cases across the country. At present, London has recorded 25 cases, the most of any region in the country.
In response to the World Health Organisation announcement of COVID-19 constituting a public health emergency of international concern, the UK’s Chief Medical Officers decided to raise the risk level from low to moderate.
The virus is having a material impact on the assessments of policymakers, especially following an emergency interest rate cut by the Federal Reserve last week.
Despite having kept interest rates on hold at their last meeting, the Bank of England (BoE) may soon follow suit and cut rates, if comments made by outgoing Governor Mark Carney are anything to go by. The bond markets currently expect rates to remain low for a number of years, which would increase the pressure for some response from the BoE.
In a Treasury Select Committee statement on 3rd March, Dr Carney stated that “The BoE’s role is to help UK businesses and households manage through an economic shock that could prove large but will ultimately prove temporary.”
Dr Carney went on to explain that the BoE “are monitoring the situation closely, across all our functions, and ensuring all necessary contingency plans are in place.”