Blend Network has said Boris Johnson’s “build, build, build” strategy to boost the economy could prove a game changer for the housing market that has struggled in recent months due to Covid-19.
At the end of June, Johnson announced his “build, build, build” recovery which puts jobs and infrastructure at the centre of the government’s economic growth strategy, with £5bn brought forward for capital investment projects.
The peer-to-peer property lender said this could prove a great help to the housing market if Johnson enables property developers have greater access to finance.
“More recently the mood in the property market has started to turn after the Prime Minister’s pledge to put the government’s ‘arms around people at a time of crisis’ and ‘build, build, build; to dig the UK out of the crisis,” Blend Network said in a blog post on its website.
“Johnson’s promise could be a game changer if it goes hand in hand with greater access to finance for the tens of thousands of small property developers and construction companies left bruised by the pandemic.
“This also represents a unique opportunity for investors using P2P platforms to lend on deals.”
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Blend Network also cited data from Nationwide’s house price index showing a 0.1 per cent year-on-year decline in house prices in June – the first time there was negative annual house price growth since 2012.
On a month-by-month basis, June house prices declined by 1.4 per cent – the second consecutive month of decline. However, this decline was less steep than May’s 1.7 per cent drop, one of the largest month-on-month declines in Nationwide’s series since it started in 1991.
“Given that the impact of the slowdown on the data tends to show with a lag due to the way the Nationwide House Price Index, it is likely that May’s 1.7 per cent decline reflected the full lockdown in April when according to HMRC residential property transaction were down by 53 per cent, while the slight pick-up in activity in May is reflected in the less steep decline of the June data,” Blend Network said.
“It is unsurprising that annual house price growth has stalled, given the magnitude of the shock to the economy as a result of the pandemic.”