In recent weeks, the government has reopened the housing market in England. However, the reopening of the housing market in England does not mean it is business as usual there.
The process of finding, buying and moving home has had to be adapted to reduce the risk of transmitting coronavirus.
In Wales, the housing market has not yet reopened, but it will continue to benefit from Covid-19 schemes that cover the whole of the UK. For example, banks and building societies have agreed to extend the montage payment holiday for a further three months. They have also agreed not to proceed with involuntary repossessions for both residential and buy to let mortgage customers until October 31st 2020.
In addition, an increasing number of construction sites have been reopening with extra measures being introduced so that builders can work safely with social distancing in place. For example, Redrow announced a phased return to construction on May 18th, while Persimmon did so from April 27th to help complete new homes under construction.
So what does this mean for the housing market in Wales?
There are a number of factors that need to be taken into consideration when answering this question. First, there are a number of sales that have been suspended due to the coronavirus. At the current moment it is unclear whether or not these suspended sales will progress once lockdown ends.
A second factor is whether a pent-up demand for housing has been building during the lockdown period. It maybe that some households will want to reconsider their housing needs. For example, if some businesses retain home working as a normal part of their working structure, some staff may consider moving further away from their workplace as they may feel they can manage commuting further distances on just one or two days a week. Such a shift in attitude could create a boost to housing demand.
Third, the timing of the loosening of the lockdown restrictions on the housing market in Wales is becoming clearer. Mark Drakeford, Wales’ First Minister, has announced that at the next review of the Covid-19 regulations on the June 19th options for facilitating people moving home to boost the housing market will be considered.
However, Rushi Sunak, the Chancellor of the Exchequer, has made it clear that a severe recession is coming in the next few months. This may well impact on consumer confidence in making major purchases such as buying a new home.
So on balance, with the housing industry having to make changes to the way it works and uncertainty about whether or not consumers are going to come forward to buy, It seems likely that it is going to take some time for progress in the housing market to develop.
