Does the market for high rise apartments have a future?


We went into lockdown with one housing market and came out of it with quite another. Joey Gardiner reports on what the pandemic means for developers of high-rise housing


Source: Shutterstock

The impact of the coronavirus crisis on the housing market is a much-contested issue at the moment. Estate agents point to buoyant demand and a rapid bounce back in activity as market restrictions have been lifted, and decry the doom-mongers.

Undeniably, the strength of the rebound has taken many forecasters by surprise – Rightmove reported last week that prices had now risen 2.4% above the pre-lockdown level amid surging demand – and some are rapidly recalibrating their predictions.

But most economists point to the inexorable logic of the economic crisis: the collapse in GDP – 20% down in April and May; the thousands upon thousands of jobs lost; the huge uncertainty continuing to hang over large parts of the economy. Forecasters continue to predict large peak-to-trough falls in demand for homes and, consequently, prices – even if they are pushing the timing of the fall slightly to the right.

Earlier this month the Office for Budget Responsibility (OBR) released forecasts suggesting a fall of more than 8% in house prices in the year to March 2021 was most likely, though it said the drop could be as much as 16%.

Whatever happens to house prices, there is no doubt that residential transactions will fall, severely impacting residential developers. The OBR estimates transactions will fall by between 35% and 38% this year, and preliminary results from listed housebuilders are already showing the scale of lost revenue.


This is premium content. Please subscribe for access.

Only logged in subscribers have access to it. Already a subscriber? Login here

Subscribe to Housing Today 

Subscribe now

Become a member of Housing Today and gain access to …

  • NEWS – Follow the sector’s specialist Housing News service
  • LEARN - Gain access to Housing Today’s Specialist CPD modules
  • INSIGHT - Analysis of the UK’s growing Housing market
  • WIN WORK - Special reports and actionable sector intelligence
  • DATA - Benchmark your business with specialist data and league tables
  • UNDERSTAND - Read leading edge thought leadership from C-suite sector leaders and experts
  • ACCESS - extensive Housing Today archive
  • DISCOUNTS – Special Rates at Housing Today Events
  • EXPERIENCE - Expertise journalist knowledge

Subscribe now for unlimited access.

Get access to premium content -  subscribe today

Register to receive daily newsletters