The UK housing market had remained stagnant for the last two months in view of the restrictions related to Covid-19. With the housing market now reopened for business following an unprecedented drop-off in new buyer activity, there may be a small bounce in sales due to pent-up demand.
Prices are expected to recover more quickly in Greater London and Prime Central London (PCL), led by a spike in demand from investors and opportunistic owner-occupier buyers, according to property adviser JLL.
One of the reasons for the demand for new homes to remain in positive territory is the weaker launch of new build homes. JLL expects UK new housing starts to plummet to 80,000 in 2020, well below the Global Financial Crisis in 2008, when starts bottomed out at 100,000. This will create a negative impact on the number of new homes entering the market with corresponding growth in the number of prospective buyers.
New home completions should fare slightly better as housebuilders prioritise these in the short term. However, social distancing will extend the length of time it takes to deliver a traditionally built new home by up to 50 per cent compared with pre-Covid-19 which will create a fundamental dampening effect on new supply.
Strawberry Star, which has several developments across London and commuter towns, is seeing growing interest among buyers for new build homes. While the interest levels are yet to reach the pre-Covid-19 era, there is certainly hope with buyers gradually returning to the market.
Prices are expected to recover more quickly in Greater London and PCL, led by a spike in demand from investors and opportunistic owner-occupier buyers, predicts JLL