Real estate agents remained hopeful that pressure from a stamp duty holiday would fuel housing demand despite the new stay-at-home orders
British real estate agents remained hopeful that robust housing demand will continue despite Prime Minister Boris Johnson’s announcement Monday night that England would enter the most extreme lockdown measures since Covid-19 first gripped the U.K. last spring.
“The latest news of another national lockdown should do little to slow the momentum of the U.K. property market, given that official government advice still deems it OK to transact and move home,” said Marc von Grundherr, director of estate agency Benham and Reeves, following the announcement.
The so-called Tier 5 restrictions will close all schools with a few exceptions, including nurseries, and urge all non-essential workers to stay home except for necessary shopping and exercise, according to the government website. In a televised briefing on Monday, Mr. Johnson asked that all residents start abiding by the rules immediately and said he expected Parliament to pass the new rules into law on Wednesday, with other governments in Scotland and Northern Ireland enforcing similar measures to stem the spread of a new, more transmissible variant of the Covid-19 virus.
Nevertheless, home sales and rental agencies are deemed essential businesses under the heightened restrictions, and home viewings are allowed with health precautions in place, the government said in a 22-page document outlining the new rules.
“Estate and letting agents and removals firms can continue to work. If you are looking to move, you can go to property viewings,” the guidance said.
Still, other parts of the new guidelines strongly advise people to stay within their town or region. While those rules could dissuade or confuse house hunters interested in moving further afield, several estate agents have already expressed optimism that demand would remain strong in the British housing market—which has proved a bright spot in the economy.
“It remains business as usual for the U.K. property market and as a result, it’s unlikely we will see any decline in the huge levels of buyer activity seen since last year, nor should we see property prices detract from their current upward trend,” Hugh Wade-Jones, managing director of lender Enness Global Mortgages, said in a statement following the lockdown announcement.
The government has faced additional pressure to keep the housing market open given a stamp duty holiday on the first £500,000 (US$678,800) of the sale price that’s set to expire at the end of March. A huge pipeline of buyers looking to finish transactions ahead of that deadline has built up, Mr. Wade-Jones said.
“Many will be thankful that the government has refrained from placing the property market back into a pandemic induced cryogenic deep freeze,” said James Forrester, managing director of Birmingham-based estate agency Barrows and Forrester. “It’s vital that we remain open and able to service the unprecedented levels of market activity seen in recent months.”
The heightened lockdown, including school closures, will likely last until at least mid-February—at which point a critical mass of vulnerable populations will have been vaccinated against the Covid-19, Mr. Johnson said on Monday.
The U.K. is now reporting more than 50,000 new coronavirus cases per day, and hit a record high of more than 57,000 on Saturday, according to data from Johns Hopkins University.
“I know how tough this is, and I know how frustrated you are and you’ve had more than enough government guidance,” Mr. Johnson said, adding that he believes the U.K. is “entering the last phase of this struggle.”
