A LEADING estate agency has predicted that there will be over half a million fewer house sales in 2020, as a result of the coronavirus pandemic.
The fall is sales will deprive the Treasury of £4.4 billion in lost income from stamp duties, as well as having a significant impact on spending in related industries. Like many other sectors of the economy, the lockdown is having a devastating effect on the housing market, as people stay at home in compliance with the government’s social distancing guidelines. Researchers from the estate agents Knight Frank have projected a fall of 38 percent in house sales, which equates to 526,000 fewer homes being sold in 2020 compared with last year.
Prior to the curfew, the company had confidently estimated that sales for the year would increase by almost 23 percent, boosting Treasury tax receipts from the housing sector by almost £2 billion to £10.2 billion.
The research also calculated that the suspended market would lead to 350,000 fewer mortgage approvals, including 150,000 to first-time buyers.
Tom Bill of Knight Frank told the Daily Telegraph that lenders were taking steps to increase their business.
He said: “It’s become increasingly clear [that] lenders are eager to do business.
“Two weeks ago many banks retreated to the safety of more conservative lending criteria as they were overwhelmed by calls in the wake of two Bank of England rate cuts and the shutdown of many international call centres.
“But in recent days we’ve seen the major lenders coming back, raising the loan-to-value ratios they are willing to lend at, eager to gain market share.”
The fall in sales will have a profound effect on other industries, that depend on the housing market.
According to Knight Frank, the DIY and renovations sector is likely to suffer £7.9 billion in lost revenues, with removals companies losing up to £395 million in earnings.
Source: Daily Express.
