News that the UK is the first country to approve a Covid-19 vaccine has been welcomed by property experts who hope that a successful roll-out could help to stave off a housing market downturn next year.

However, with Brexit on the horizon, the end of the stamp duty holiday in March, the scaling back of Help to Buy and the winding down of the furlough scheme, many headwinds remain.

PWC economist Jamie Durham says that the house prices and transaction volumes are still being propped up by pent-up demand following the closure of the market in the first lockdown and people rushing to take advantage of the stamp duty holiday.

He says: “Transactions in the first 10 months of 2020 are nearly 20 per cent lower than at the equivalent point in 2019, which is equivalent to around 180,000 transactions. 

“While some of these transactions may have been put off completely, there is likely to be a sizable number of people who delayed their purchase, but are still looking to move.

“The stamp duty holiday also means that some people who were planning to purchase a home in the future, for example in 2021 or 2022, may bring forward their plans in order to benefit from the tax savings.”

Durham warns that he end of both the stamp duty holiday and furlough scheme in March 2021 pose considerable risks to the market outlook:

“The stamp duty holiday is likely to cause transactions to be concentrated over the coming months, which may then drop off sharply after March when the holiday ends. 

“The cost of purchasing a home will also increase again when the holiday comes to an end, which may mean people can afford to pay less and put downward pressure on prices.

“The end of the furlough scheme could push up unemployment as some businesses adjust to new, longer term dynamics and some businesses fail. “The Office for Budget Responsibility expects unemployment to peak around 7.5 per cent in the middle of 2021, and the risk of losses may constrain the willingness of banks to lend.

“Despite this, the realistic prospect of a vaccine, and the potential to return to a version of ‘normal’ by Easter, may help to mitigate the risk of a more severe downturn in house prices in 2021 than would otherwise have been the case.”

Altura Mortgage Finance managing director Rob Gill says: “The big question regarding the vaccine and its impact on the housing market is how effective will it be in allowing the economy to reopen? 

“Can the hospitality, retail, leisure and travel industries, along with the millions of jobs they support, get back up and running and recover? 

“Can firms get staff back into offices, which the pandemic seems to have proved is crucial to the efficient running of large organisations. 

“Will town and city centres start to come back to life, an issue that affects small businesses, cafes and countless other drivers of the economy? 

“People will only buy new homes if they feel confident about their prospects.”

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “There’s no doubt rising hopes of a reliable vaccine at the end of October/beginning of November were a shot in the arm not just for the economy but the housing market just as we were starting to see the initial post-lockdown surge begin to fizzle out.

“House prices and transactions have continued their inexorable rise as pent-up demand has been boosted by the stamp duty holiday, despite the flagging economic recovery and particularly rising unemployment

“As a result, we expect buying and selling activity to continue – albeit at a slower pace but with no severe price correction, even when the chances of taking advantage of the stamp duty concession fade or die.”