Heard it from Haslams: Turbulence ahead but demand remains

Steve Woodford, managing director of Haslams estate agent in Reading, kicks off a new series of monthly updates on the housing market.

At Haslams we are often asked what our thoughts are on the current state of the market. In a time when we had never heard of Covid-19, and Brexit was a glint on the horizon, things were much easier to predict.

However, in these extraordinary times, forecasting what lies ahead in both the long and short term becomes a challenge for estate agents, developers and other industry professionals.

There is good news to come out of the economic turbulence. The pent-up demand as a result of Brexit delays and then from lockdown has caused record highs. One example is that house prices have seen a significant increase compared to last year.

Russell Galley, the managing director of Halifax, said: “A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire among some buyers to move to bigger properties, and of course the temporary cut to stamp duty.”

Market data suggests that the desire to move home now is largely due to how households fared during lockdown and is currently a driving force to keep the market momentum going. Where young adults were living with families there is a yearning to leave the family nest and have their own home, having managed to save a significant amount during lockdown.

For couples cooped up in a small city apartment they are choosing to move to suburban locations with outside space and a dedicated workspace due to continued working from home. Families are also seeking more room; often for new additions – babies or puppies – and they want to be in less populated, rural settings, and are embracing the country lifestyle.

The initial boom that we saw in August is beginning to slow now that we are coming towards the end of September. The largest concern for estate agents and home buyers is employment stability with furlough ending next month.

To put it simply, widespread unemployment or fear of redundancies reduces the number of potential home buyers and can cause wage growth to stagnate.

The Thames Valley job market has been affected like everywhere in the UK. However, due to the fact that more than a fifth of Berkshire firms operate in the professional, scientific and technical industry and just under a fifth in the information and communication industry, the vast majority of employees can work from home and so Covid-19 disruption has been somewhat limited.

In summary, the economic outlook for the property market may be looking somewhat turbulent when we base our predictions on the levels of employment in the UK, as the furlough scheme is due to end in October.

But the desire to move to a larger or more rural home – and to do so before another lockdown may happen – remains strong.

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