LONDON (Reuters) – British home prices will rise 2.0% this year following a post-lockdown boom in the housing market, according to a Reuters poll, marking a sharp turnaround in views from a 5.0% fall predicted three months ago.
Britain’s economy shrank more than 20% in the second quarter after the government forced businesses to close and citizens to stay home, but it is expected to rebound with 15.8% growth this quarter as some restrictions have been relaxed.
The lockdown meant people spent more time indoors and a dash for larger homes and gardens pushed up prices in September, a survey by property website Rightmove showed last week.
That chimed with other surveys that have shown a post-lockdown surge in the market, also helped by a temporary cut in property tax.
Prices will rise 2.0% this year, the Sept. 15-25 poll of 22 property experts showed, but stagnate next year after the tax break finishes and due to an expected spike in unemployment following the closure of the government’s furlough scheme.
“Those who have been hit medically or financially by COVID-19 will have bigger issues to worry about than moving for a bigger garden,” said property market consultant Henry Pryor.
“We may well run out of a pool of buyers prepared and able to move for lifestyle reasons as the flood of negative headlines about the true cost of the pandemic to individuals and the nation starts to become clearer.”
When asked about the risk of the recent surge in prices reversing by the end of the year, respondents were split, with nine saying it was high, seven saying it was low and three saying