What impact will the COVID-19 vaccine have on the housing market?
The news of the Pfizer/BioNTech vaccine being rolled out in the UK will bring consumer confidence back to the housing market, according to Nick Morrey, product technical manager at John Charcol.
A vaccine, developed by Pfizer/BioNTech, has been deemed safe for use in the UK and will be rolled out from next week.
The UK has become the first country in the world to approve the vaccine for use.
Morrey, said: “The rolling out of the COVID-19 vaccine is extremely good news for everyone.
“We expect it to have a positive effect on consumer confidence that things are going to return to ‘normal’ later in 2021.”
Martin Stewart, director of The Money Group, said: “The vaccine is great news for the UK as a whole and it might bring some much needed normality back to the wider economy and not just the housing market.
“It might surprise people to hear this, but the two are actually not mutually exclusive.
“As the saying goes, what is good for the goose is also good for the gander and in some respects we have been lucky and well protected in the housing bubble from the onslaught of the pandemic.”
However, Morrey believes that the impact of the vaccine on the housing market is likely to be overshadowed by the stamp duty holiday end date of 31 March 2021.
He added: “Many purchases all over the country that people had thought to do in 2021 have been brought forward to now, and we expect the market to have a correction in 2021 as a result, especially after the uncharacteristic increase in prices in recent months.”
The Medicines and Healthcare products Regulatory Agency (MHRA) outlined that the vaccine provides up to 95% protection against COVID-19.
It is expected that 800,000 doses will be available in the coming days.
Morrey said: “Assuming that the vaccine is successful in putting the spread of COVID-19 in reverse, we expect economies to recover and the housing market to strengthen again late in 2021 going into 2022.”
Morrey details that what no-one knows is to what extend the “correction” will be and how quickly prices and activity will rebound.
He added: “What I do not expect is a 15% or higher drop, since the moment the public read that house prices are falling they will stop selling their properties, supply will dry up and prices will stabilise as demand and supply find their equilibrium.
“There will be some regional exceptions to this but broadly speaking this tends to happen and we expect 2021 to be no different.”
Stewart said: “If we are to reach the sunlit uplands that 2021 might promise us then we need to move forward as a strong overall economy and not a fragmented, disjointed project travelling in different directions at different speeds.”