In the property industry, the initial effects were swift and obvious. Social distancing requirements mean home moves have slowed dramatically; in fact, estate agency Knight Frank has predicted that over a third – 38% – of anticipated house sales in 2020 will be lost due to the coronavirus pandemic.
However, social distancing won’t last forever.
So when we are no longer hampered by physical restrictions, what will this mean for your home moving dreams? Unfortunately, it appears that the effects of the Covid-19 crisis are further-reaching than just stopping home moves themselves.
A Bank of England report showed that mortgage approvals fell to a seven-year low in March, and many mortgage lenders pulled product ranges from the market altogether, suggesting that banks may be more reluctant to lend in the current conditions – and a potential recession will do nothing to alleviate their fears.
But is our economy going to go into recession?
Well, it’s certainly possible. One of the key indicators of a recession is the GDP, or gross domestic product, slowing down. This is a measure of the goods and services produced by a country within a particular period – and, during this period of extraordinary inactivity, it seems extremely likely that the UK’s GDP will be hard hit and property experts anticipate a slow recovery for the economy from 2021 onwards.
For those of you looking to move house, this will raise red flags. Selling your home in a recession, when house prices are more likely to be very low, can feel like a risk at best, and – at worst – mean losing out on equity you have spent many years building up. On top of this, economic crises can threaten job stability, making the risk of taking on a new, possibly larger, mortgage seem daunting.
So how can you maximise your home’s potential now with an eye on the future of the property market?