Covid-19 will change how people think about housing

Germs---coronavirus---shutterstock_1620672310

As restrictions in the UK tighten and the effects of the pandemic become more real, Yolande Barnes explores what it could mean for housing economics

At some time last year, it is thought that a bat passed on a mutated virus to a trafficked pangolin (a scaly ant-eater) in a wet market in Wuhan, China. Now, that same virus has spread to unknown thousands of people across the globe and there is only one topic at the top of the boardroom agenda: the covid-19 coronavirus outbreak.

As Berkeley Group’s statement cancelling a forthcoming £455m shareholder dividend shows, increasingly developers, lenders and investors are going to have to take decisions around the risks that the outbreak poses, and face up to some unpalatable options.

But long before the ill-fated pangolin’s revenge, the outlook for housing markets had already altered, largely unseen and unrecognised by many in the industry. The prospect for real estate values, including house prices, in coming decades was always going to be different in a world of low inflation and low, no longer falling, interest rates. High but stable prices and no-capital-value-growth-without-rental-growth are becoming the norm so some investors were waking up to the fact that all real estate has moved up the risk curve. Covid-19 will change the shape of that risk curve further.

This is premium content. 

Only logged in subscribers have access to it.

Login or SUBSCRIBE to view this story

Gated access promo

Existing subscriber? LOGIN

A subscription to Building Design will provide:

  • Unlimited architecture news from around the UK
  • Reviews of the latest buildings from all corners of the world
  • Our monthly digital edition including stunning photos, building and technical studies
  • Full access to all our online archives
  • PLUS you will receive a print copy of WA100 worth over £30 when it is published in December.

Subscribe now for unlimited access.

Alternatively REGISTER for free access on selected stories and sign up for email alerts