As the world scrambles to contain the coronavirus outbreak and find a cure, the economic repercussions are now more than just a concern.
The virus, which was reported to have originated from Wuhan, China has caused a strain for those in the manufacturing industry whose production depends on parts sourced from China. Lockdowns and quarantines, imposed by the government, to ensure the besieged nation’s health and safety, have inhibited the resumption of work since the Chinese new year break.
In a combined global effort to control the further spread of the virus, most travels have been grounded and entries to several countries have either been restricted or banned - the tourism industry is taking a beating.
How is the coronavirus, now a pandemic, affecting the property market in the UK?
Although house prices climbed 0.3% to a record of £240,677 this February, UK’s biggest mortgage lender, Halifax warns of the possible effect of the outbreak on the property market later this year.
From the managing director of Halifax, Russel Galley:
“The UK housing market has remained steady heading into early spring. The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.”
Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”
Lucy Pendleton, founder director of estate agency James Pendleton, said: “Registrations for purchase are running extremely hot. Despite the newspapers and TV screens being peppered with images of people wearing face masks and plastic bottles on their heads, there’s still a huge appetite to move, and buyers and vendors have so far refused to put their searches on hold.”
However, Ms. Pendleton fears that the adverse effects of the virus have started to show its face. According to her, a sale which was within days of completion, failed to pull through:
“The buyer worked in the events industry, which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely. The hope is this will remain an isolated case but the impact of the virus will become clearer in March.”
If the threat of the virus continues to escalate globally and start affecting the economy, a drop in employment could directly affect the demand for housing.