Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

An escape to the countryside to drive UK housing activity: Reuters poll

Economy Feb 02, 2021 02:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: A housing estate is seen next to farmers' fields in the Hallam constituency of Britain's Deputy PM Clegg in Sheffield 2/3
 
WMB
-6.45%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Jonathan Cable

LONDON (Reuters) - British house prices will flatline this year as a property sales tax cut is due to expire and unemployment is expected to rise, according to property market analysts polled by Reuters who said activity would be driven by a desire for more living space.

Like much of the world, Britons have endured months of tough lockdown restrictions to try to stop the coronavirus from spreading and having been cooped up indoors, with many working from home. Some of those who can afford to now wish to move.

"Living in a flat in central London with no outdoor space has been very difficult since the first lockdown began; sharing a small dining room table to work on for 11 months is far from ideal," said Jonathan Penny, who works in the capital for the charity Help Musicians.

"The pandemic has proven, however, that working part-time from home is possible and has given us the confidence to relocate to the coast to give us a better work/life balance."

(GRAPHIC: Reuters Poll - UK and London house prices outlook - https://fingfx.thomsonreuters.com/gfx/polling/yzdpxgeeyvx/Reuters%20Poll%20-%20UK%20housing%20graphic%20version%202%20-%20Jan%202021.PNG)

When asked in the Jan. 13-28 poll what would be the biggest driver of housing market activity this year six said a want for more space. Five said a successful coronavirus vaccine rollout.

Other reasons given included fiscal stimulus, easy monetary policy and an economic recovery.

Britain has already vaccinated over 9 million of its citizens and when asked whether a resurgence in COVID-19 would derail housing activity this year 12 said it was a low or very low risk. Six said it was high and none said very high.

"We are at the beginning of the end of COVID-19," said Russell Quirk at estate agency Keller Williams (NYSE:WMB).

"Shots in arms and a government that will very soon have to focus on economic recovery as their absolute priority as hospitals empty, provides a significant risk mitigator to the virus being a further obstacle in mid- to late-2021."

After contracting sharply last year the UK economy was expected to grow 4.9% this year and 5.3% next year, a separate Reuters poll found.

But house prices, the bedrock of consumer wealth in Britain, will on average end this year where they started it, according to the latest poll of 26 market specialists, unchanged from a September prediction. Next year they will rise 2.7%.

"The negative economic impacts of COVID-19 have bypassed the housing market so far due to the extraordinary support measures put in place by the government, regulators, and banks," said Andrew Wishart at Capital Economics.

"But while policy has probably reduced and delayed the impact of COVID-19 on house prices, it has not removed it altogether and the pandemic will take its toll this year as policy support is removed."

Home prices in London, long the hotbed for foreign investors, were also expected to flatline this year before rising a more modest 2.0% in 2022.

"Changing commuter patterns as a result of the pandemic and foreign buyer dynamics make the market less bouyant," said Miles Shipside at property website Rightmove.

Despite ultra-low interest rates, when asked to describe the level of national house prices on a scale of 1 to 10 from extremely cheap to extremely expensive, the median response was 7, up from 6 given in September, and in the capital it was an unchanged 8.

"House prices in the capital are growing far faster than wages, from an already high base, putting buying a home out of reach for many," said Jamie Durham at PwC.

"The stamp duty (property sales tax) holiday, a shift in preferences towards larger properties, and pent up demand are driving activity across the country, which is in turn leading to price growth in the market."

An escape to the countryside to drive UK housing activity: Reuters poll
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email