The Welsh Government today announced a two-week "circuit breaker" lockdown that will effectively close the housing market again.
From 6pm on Friday 23 October until the start of Monday 9 November, estate agent offices will be forced to shut and in-person property viewings will be banned.
Meanwhile, restrictions across Britain are tightening as London and Lancashire moved into tier 2 restrictions last week and Greater Manchester sits on the edge of tier 3. A circuit breaker lockdown could also be on the cards for England.
What does the shift mean for the property market? The effects could be somewhat contradictory.
Lockdown and the rise of working from home have in themselves become factors driving a surge in house moves – added restrictions may mean more urgency for those who want to upsize. Even if a local market is suspended, last time that simply meant demand built up and flooded the market when restrictions lifted.
Yet any hit to the economy is a serious threat to house prices. And if restrictions halt activity for an extended period of time, future sales could be mired by logistical delays from the backlog and the imminent end of the stamp duty holiday.
Here, we look at what could happen this time around.
Can I still move house in Wales during the circuit breaker?
Buyers and sellers can still move house if they cannot postpone their transactions until after the circuit break.
Removals, surveys and valuations can still go ahead in line with guidance on working in other people's homes, which includes maintaining a two metre distance and wearing PPE. Though surveyors should not enter occupied properties.
But in-person property viewings can no longer go ahead and high street estate agents must close their offices for the two-week period. Virtual viewings are still allowed.
Travel to or from a second home in Wales is also banned.
Could the property market close in England and Scotland?
Even under the guidelines for tier 3, the most severe level of coronavirus restrictions in England, the property market will stay open under the existing Government guidance.
Property viewings are allowed providing all parties follow social distancing guidelines and wear PPE, estate agent offices can remain open for business and removals firms can continue to work.
The local lockdowns that happened before the tier system was introduced, in areas such as Lancashire and Birmingham, similarly did not involve changes to property sector guidance. Markets have been allowed to function under the same social distancing guidelines that are currently in place across the country.
Likewise in Scotland, which currently has more stringent national restrictions, all aspects of a property sale or purchase are also still allowed.
Naturally, guidance can change. But the Government has demonstrated that it considers protecting the property market particularly important – in England, the sector reopened on May 13, many weeks before lockdown restrictions were formally eased.
Prime Minister Boris Johnson has stressed that the Government wanted to allow business to continue and keep the economy going.
How will a second lockdown affect house prices?
The relationship between a second lockdown and house prices is a complex balance that could tip the market either way.
Lucian Cook, of Savills estate agents, said: “There’s an argument that the possibility of a second lockdown is supporting the current momentum in the market, driven by buyers reassessing their housing needs and looking to make lifestyle changes.”
Transaction data shows that the market is being driven by wealthy upsizers. In the short term, increased social distancing measures such as curfews and a push back to working from home will further entrench buyer demand for larger properties with outdoor space that are further away from people’s workplaces.
Mark Hayward, of Propertymark, an estate agent trade body, said a second lockdown “could reaffirm people’s reasons and desire to move even more." During local lockdowns, such as that in Leicester, further restrictions did not curb housing activity.
A longer term shutdown, however, is “more of a risk”, said Mr Cook. If unemployment stays higher for longer, buyers will become more cautious and lenders will be more risk averse, said Mr Cook. The sectors of the housing market that are particularly dependent on borrowing – primarily the first-time buyer sector – will be more constrained.
House prices would then be hit harder by the problems that are currently looming on the horizon, which include the end of furlough, mortgage holidays, the possibility of a no-deal Brexit, potential tax rises in the autumn Budget and the end of the stamp duty holiday in March 2021.
But if the country enters an extreme lockdown scenario, it is likely that the Government would intervene with further support measures, said Mr Cook.
Will I be able to get a mortgage?
Lenders have effectively already responded to the threat of a second spike of coronavirus and the resultant economic shock.
Chris Sykes of Private Finance, a mortgage broker, said: “A second lockdown and the corresponding economic repercussions are exactly why mortgage lenders have been being cautious of late.”
New restrictions will likely not be a game changer for the mortgage market, but they will cement the current trends.
Mortgages for buyers with deposits smaller than 20pc will “almost certainly” become even harder to find, and those that are available will charge even higher rates to account for the risk, said Mr Sykes.
The counterpoint is that banks will therefore face more competition from other lenders for larger deposit mortgages on longer terms. These will be “the key battleground” said Mr Sykes. Fees on these mortgages could get even lower.
Meanwhile, the sector will benefit from having previously adapted to remote working and online valuations. “We expect banks’ internal processing to continue almost unhindered,” said Mr Sykes.