Lockdown wipes out UK house price growth

A third national Covid-19 lockdown is set to crush any hope of house price rises in the UK this year. Knight Frank has revised its forecast for the year, citing a “tumultuous backdrop of a global pandemic… exacerbated by a third UK national lockdown”. It has scrubbed forecasts of 1% growth in 2020, with pricing now expected to remain flat for the year. Knight Frank has dropped 1% from London forecasts, with 3% growth anticipated in prime central London and 4% in prime outer London. Elsewhere, it expects 4% growth in prime UK cities and 1% in Greater London. Tom Bill, head of UK residential research at Knight Frank, said: “The difference between the first and second half of the year will be starker for the property market as a result of tougher measures designed to combat the new variants of Covid-19.” Last week, the government confirmed that the housing market will remain open during the third lockdown. However, it warned that “it may be necessary to pause home moves” to curb the spread of the virus. The guidance said this could happen on a local or national level, which could further impact markets in both the short and the long term. “There has been a subtle shift in the supply-demand dynamics as more sellers hold off due to Covid-related uncertainty,” said Bill. A spike in supply could push prices down in Q2, he warned. However, he added that further drops anticipated with the end of the stamp duty relief may be offset by the vaccine rollout, which is expected to buoy markets. Bill said: “While the third lockdown may remain in place until March, any evidence that the vaccination programme is limiting the impact of Covid-19 may begin to encourage more activity, and we will keep the forecasts under review.” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette Photo © Dinendra Haria/Rex/Shutterstock