Pent-up demand following lockdowns, a temporary tax cut, record low interest rates and government support for workers and mortgage holders have spurred a rebound that’s taken analysts by surprise.
The average price of a UK homesoared to an all-time high in September, according to leading mortgage lender Nationwide, despite a pandemic-induced recession, rising joblessness and fears that a second coronavirus wave and a messy Brexit could stall the economic recovery.”
Confidence in the housing market has been unexpectedly strong,” said Hansen Lu, a property economist at Capital Economics. “We’re seeing a V-shaped recovery.”
But a relatively smallnumber of wealthy buyers who already own properties appear to be driving the recovery, raising questions as to how long the boom will last, particularly ifthe economy’s prospects worsen.At least for now, the economic pain of the pandemic has mostly been felt by younger, lower income individuals who were already least able to buy homes, said Neal Hudson, founder of housing market research firm Residential Analysts.By contrast, those who are buying may be in an even better financial position than they were before the coronavirus hit, as overseas holidays were canceled or they went out less during lockdowns. Add in the cut to purchase taxes, which runs until the end of March, and demand for more expensive houses has surged, further liftingprices.
By Hanna Ziady , please read the full article at CNN Business.