Covid-19 lockdown to cost UK’s housing market US$18 billion in lost sales
- The lockdown will result in 526,000 fewer home sales this year, says Knight Frank
- Savills has cut its UK housing sales forecast by 52 per cent to 566,000 units this year and expects prices to fall between 5 and 10 per cent
The coronavirus-induced lockdown in the UK is expected to cost the country’s housing market and associated businesses an estimated £14.3 billion (US$17.8 billion) in lost revenue this year, according to Knight Frank.
The UK was initially placed on a three-week lockdown from March 23, but that has been extended for at least three more weeks as the British government takes steps to contain the Covid-19 outbreak that has affected 126,000 people and claimed 16,500 lives as of Tuesday.
The consultancy said the restrictions will subsequently result in 526,000 fewer home sales this year and 350,000 fewer mortgage approvals, including 150,000 mortgages for first-time buyers. It would also lead to a loss of £7.9 billion in do-it-yourself and renovation spending, £4.4 billion in stamp duty, £1.6 billion in value added tax and £395 million in earnings for removal companies, it added.
The real estate market was worth £101.2 billion in 2018 and contributed 7 per cent to UK’s economic output.
“This fall in activity will be multiplied across the economy,” Knight Frank said. “There will be a wider economic impact, including the loss of employment and general mobility.”