Recession and rising unemployment have historically been associated with a fall in the value of residential homes in the UK, so many expected the housing market to be one of the casualties of the pandemic.
Residential property transactions certainly collapsed during the first lockdown in March, slumping to around half the level seen at the start of the year. The number of mortgage approvals for house purchases, meanwhile, declined to its lowest on modern record.
Influenced by this, the Office for Budget Responsibility (OBR), the Treasury’s official forecaster, last summer was forecasting average house prices to slide by around 8 per cent over the course of 2020 in its central scenario and by 16 per cent in its downside scenario.
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