The surge in Omicron cases and possible future restrictions are set to hit the housing market in 2022 - and may even deter vendors from allowing some viewings.
Robert Gardner, chief economist at the Nationwide - which last week reported a 10.8 per cent annual house price increase across the UK in 2021 - says: “It appears likely that the housing market will slow [in 2022] since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax.
“The Omicron variant could reinforce the slowdown if it leads to a weaker labour market. Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck.
“However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead. The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth. Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term.”
But housing expert Jeremy Leaf - who runs his own agency in north London and is a former chair of the residential faculty at the RICS - warns that the virus could have a more specific impact in 2022.
“The Nationwide survey not only demonstrates the underlying strength of the market after the withdrawal of the stamp duty holiday and furlough but gives a broad hint of the direction of travel for 2022” he says.
“We are seeing much the same at the sharp end, too, including in the run up to Christmas with rising Omicron cases, inflation and interest rates resulting in reduced activity but not a significant correction.
“Further Covid restrictions will only lead to a build-up of more pent-up demand. But momentum will continue to be compromised by lack of supply as we have found sellers tend to be more put off than buyers because they are concerned about having people in their homes for viewings.”
Meanwhile Jonathan Rolande of the National Association of Property Buyers, says the industry may need flexibility to cope with increased vigilance as Omicron surges.
“Everyone involved needs to be flexible and respectful of people who may become nervous. Move dates might have to be moved if someone tests positive. Solicitors may slow-down again as they re-adjust to working from home” he says.
“Estate agents would also be well advised to make clear, ahead of viewings, that masks are needed to avoid any confrontations on the doorstep when a viewing is due to take place.”