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House-hunting rebound 'set to be short-lived' as recession bites

Sky News logo Sky News 27/05/2020
a sign on a pole: A large proportion of would-be buyers have put their plans on hold, citing market uncertainty and wage cuts © Reuters A large proportion of would-be buyers have put their plans on hold, citing market uncertainty and wage cuts

A surge in house hunting with the reopening of the market earlier this month is expected to be short-lived as the recession hits, a property website has warned.

Zoopla recorded a spike in traffic of 88% across England during the week coronavirus restrictions for potential buyers were eased as the country's housing market reopened.

But despite this, and overall demand being 20% higher than at the start of March, the firm expected the rebound to be reined in as the economic slump bites and jobs are lost.

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Zoopla believed a significant proportion of sales that had been agreed before the COVID-19 lockdown would continue, but said growing uncertainty over future household finances will test the market in the coming weeks.

Its research found around 40% of would-be buyers surveyed had put their plans on hold, citing market uncertainty and cuts to income as deterrents.

Richard Donnell, director of research and insight at Zoopla, said: "The scale of the rebound in demand for housing is welcome news for estate agents and developers, but it is also surprising given projections for a sharp rise in unemployment and a major decline in economic growth."

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He added: "Millions of UK households have spent a considerable amount of time in their homes over the lockdown period and missed out on hours of commuting.

"Many households are likely to have re-evaluated what they want from their home.

"This could well explain the scale of the demand returning to the market. We need to see more supply come to the market to satisfy this demand."

But Mr Donnell expected people to be more cautious in the coming weeks.

"The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued government support for the economy," he said.

"However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution.

"Further support from the government can't be discounted and would help limit the scale of the downside risks."

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Stay at home as much as possible to stop coronavirus spreading - here is the latest government guidance. If you think you have the virus, don't go to the GP or hospital, stay indoors and get advice online. Only call NHS 111 if you cannot cope with your symptoms at home; your condition gets worse; or your symptoms do not get better after seven days. In parts of  Wales where 111 isn't available, call NHS Direct on 0845 46 47. In  Scotland, anyone with symptoms is advised to self-isolate for seven days. In  Northern Ireland, call your GP.

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