OSB: Housing demand boom will likely be short-lived

Although Zoopla’s House Price Index for June saw new sales agreed hitting reaching 28% higher than pre-lockdown numbers, the housing demand boom is not likely to be long-term, according to OneSavings Bank.

Commenting on the House Price Index, Alan Cleary (pictured), group managing director, mortgages at OneSavings Bank, said: “The surge in demand that we saw coincide with the easing of lockdown has started to convert into real sales.

“Those who had put their purchase plans on hold in March have finally been able to progress, while new buyers have also come to the market, attracted by the dip in house prices last month.

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“With buyers buoyed by the stamp duty freeze, we can expect new sales to continue rising in the coming months.”

However, the negative impact of COVID-19 on the UK economy is still to play out, and could impact the longevity of the housing demand boom, Cleary added.

He said: “This boom is likely to be fairly temporary as we wait to see how the UK economy recovers from the impact of COVID-19, and the possibility of a second wave.

“Although short-term measures have proven to be effective in stimulating transactions in the past, there is still a housing stock shortfall to contend with.

“We’ll need the government to employ some longer-term thinking to help the housing market truly recover.”