The impact of COVID-19 on the economy and UK housing market

A key feature of the lockdown is a connecting set of support mechanisms that either augment income or reduce living costs while people cannot work. These include furloughing staff and increasing universal credit but also increasing the local housing allowance and other ways in which mortgage and rent costs are forgiven or reduced (e.g. the right to a three to six month mortgage holiday). Also important has been the near-total shut down of the housing market in terms of transactions, mortgage lending and housebuilding.

Clearly, these elements of the housing market will play an important role in both the likely recession and subsequent recovery – we are likely to see house price falls, activity slowing, mortgage arrears, perhaps political pressure around preventing quite significant house possession. We want to track thinking and policy development in this sphere as well as focus on the benefits dimension and the extent to which these policies are sustained, amended or reversed. A second phase of our work is to consider the housing market’s role in planning recovery and the interventions that may be a part of that narrative: reducing stamp duty, extending Help to Buy, planning deregulation intended to speed up building, affordable supply and (discounted) first time buyer programmes, as well as other policies directed at for instance mortgagors with payment difficulties.

Team: Prof Ken Gibb (Lead Co-Investigator) and Dr Chris Foye

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This is a part of a wider project being undertaken by CaCHE exploring housing policies and the COVID-19 pandemic.