It is easy to see why those seeking to predict the direction of UK house prices post-pandemic might look to the 2008 financial crisis for clues. During the second quarter of 2020, a record quarterly contraction in gross domestic product coincided with a decline in residential transaction volumes not seen since the start of 2009, when lenders pulled up the drawbridge and would-be buyers struggled to gain finance.
The speed and scale of the bounce-back in activity and sales prices since the end of June, has marked one major point of departure from the immediate aftermath of the last financial crisis. Yet there are differences surrounding the two biggest factors governing house prices: the supply/demand balance and credit availability.
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