Housing market may shut down if covid crisis worsens

The government could shut down the housing market, as it did in the spring 2020 lockdown, if the coronavirus pandemic worsens.

Guidance issued on Monday, shortly after prime minister Boris Johnson announced the most recent national lockdown, made clear that the housing market would remain open despite the closure of the hospitality industry and most shops and schools.

However, more detailed guidance issued by the housing ministry yesterday made clear that the government will consider regional or national closures of the  market, should it be deemed necessary to manage the spread of coronavirus.

While the guidance said that, overall “the housing market in England will remain open during this national lockdown”, it added that “it may become necessary to pause all home moves locally or nationally for a short period of time to manage the spread of coronavirus”.

The government has pledged to “let you know if this needs to happen”.

The housing market was effectively closed to all but unavoidable home moves between the end of March and the middle of May, causing a hiatus in transactions that even the surge in activity since has not been able to fully make up for.

HMRC figures published at the end of last month said that despite residential sales having hit their highest level in 13 years in November, the number of transactions recorded in the financial year to date was still, at 626,550, more than a fifth lower than the equivalent figure in 2019.

The guidance issued by the housing ministry said buyers may want to make “contractual provisions” to manage the risks of undertaking transactions during the pandemic, such as the possibility transactions might have to be paused. It said: “You should not expect to immediately be able to move into any home where people have covid-19 or are self-isolating.”

However, it made clear that, for the moment, all parts of the house sale process are allowed to carry on working: “People looking to move home will be able to both continue with planned moves and view new properties to move into in the future.

“Estate and lettings agents, removers, valuers and people in sales and lettings offices and show homes will be able to continue working.”

Mairead Carroll, senior specialist for residential property at the RICS, said the body accepted that ministers needed to be able to “react quickly to what is a constantly changing situation.” However, she added: “But it is also important to recognise that restrictions on the housing market might have the potential to impact vulnerable people most – be it those needing to move at the end of their tenancy or elderly people needing a greater level of care. 

“RICS will continue to work closely with government to ensure these difficulties are understood, so our professionals can continue to work with their clients safely and productively.”

Asked about the guidance, a spokesperson for the housing ministry said the were no immediate plans to shut the housing market. The spokesperson said: “The housing market remains open during this national lockdown. While all measures during the pandemic remain under review, there are no plans for this to change.”