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Coronavirus lockdown divorce spike could boost property sales by £9.3bn

Multi colored vibrant houses in Primrose Hill neighborhood, London, UK
Divorces often lead to new properties coming on the market. (Getty)

The coronavirus is having an impact on divorce rates, with the lockdown causing a spike in the number of couples filing for a divorce, new figures show.

There has been a 42% rise in divorce inquiries between 23 March and mid-May, compared with the same period in 2019, according to the figures from Co-op Legal Services.

Based on the latest divorce data from the Office for National Statistics (ONS), this could mean an extra 38,346 couples could be calling it a day in 2020.

Therefore, the property market could see a boost of 38,346 homes entering the market if these additional divorces lead to the sale of the family home.

With the current average UK house price at £243,809, the addition of divorce properties hitting the market could total over £9.34bn ($11.85bn) in transactions for the property market, according to research from estate agent Barrows and Forrester.

READ MORE: UK house prices drop for a third month but demand picks up

This would provide a much needed boost to the industry which saw market activity slow to a trickle for much of the lockdown as the UK government urged against house moves, with many estate agents shutting their doors with physical viewings and valuations off the cards.

The coronavirus sparked the biggest monthly fall in UK house prices since 2009, according to lender Nationwide’s closely followed house price index.

Divorce property could lift property stock and keep prices up amid a considerable increase in buyer demand since the industry lockdown was lifted in May.

James Forrester, managing director of Barrows and Forrester, said: “Unfortunately, divorce is an inevitable aspect of modern day life and one that has been exacerbated as a result of a lengthy lockdown at home with our significant other.

“It’s also one of three influences that regularly see properties come to market, along with death and debt, as couples look to divvy up their existing assets in order to move on in life.

“Of course, not all married couples will own their home and not all of them will opt to sell it on, with some using it as collateral within the divorce proceedings. However, many will take this route and with such a notable spike in the number of divorces, it’s very likely we will see a boost in the amount of stock reaching the market, and the value of homes sold.

READ MORE: Taylor Wimpey reports surge of buyers' interest in new homes

“The one positive of this is that we’ve seen a huge uplift in buyer demand since the property industry reopened last month but a continued hesitance by some sellers to list and this stock boost should help meet this demand while helping keep house prices buoyant.”

The figures come after property website Rightmove reported a surge in demand for rental properties in May, saying that relationship breakdowns were partly responsible for the rise.