The growing coronavirus pandemic has tanked housing demand in the United Kingdom.
Demand fell 40 percent over the last week and the number of handshake deals — or “subject to contract” deals — were down 60 percent, according to a Hometrack study of 20 U.K. cities first reported by Mansion Global.
Hometrack projects transaction volumes to drop 60 percent in the second quarter and for demand to fall steadily through the third quarter.
“These are uncertain times for the housing and mortgage industries,” Hometrack managing director David Ross said.
Doctors have confirmed nearly 12,000 cases of COVID-19 in the U.K. as of Friday afternoon local time, including Prime Minister Boris Johnson. Nearly 600 people have died of the sickness in the country.
While activity is way down, prices remain stable and are expected to hold up through the next two months because most sellers are not “forced sellers” — they can wait for a stronger market.
Government economic aid and relief from lenders to property owners could help sustain prices. Prices would likely start to drop if people are forced to put their homes on the market to counter economic hardships like loss of income.
U.S. lawmakers just completed a deal for a $2 trillion stimulus package to prop up its own economy through the pandemic.
Domestic real estate stocks have dropped sharply over the last several weeks, but rebounded somewhat this week as news of a finalized deal emerged.
The strongest U.K. markets in February, before the pandemic took hold, were Nottingham, Leicester, and Edinburgh. Each posted annual price growth of more than 3.4 percent. London recorded a mild 0.5 percent year-over-year increase in prices in February. [Mansion Global] — Dennis Lynch