Property sales could surge by £9.3bn this year because of a rise in divorce enquiries made during lockdown, research suggests.
There has been a 42% increase in divorce enquiries between 23 March and mid-May, compared with the same period in 2019, according to Co-op Legal Services.
The Office for National Statistics (ONS) reports that there are 91,299 divorces each year in England and Wales, and this 42% increase means that an additional 38,346 couples could be ending their relationship in 2020.
While not all of these couples may sell their homes, estate agents Barrows and Forrester has calculated that with the average house price currently £243,809, the addition of these 38,000 homes could equate to a total value of £9.3bn in transactions for the housing market.
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.”
Housing Market Recovery
The number of homes sold this year is likely to be significantly lower than in 2019, when it was over just one million according to Barrows and Forrester, due to the impact of the coronavirus pandemic on the housing market.
Around 373,000 property sales were put on hold during lockdown, with social distancing rules making home viewings and valuations more challenging. Although the housing market reopening in May led to housing demand hitting the highest level in nine weeks.
House prices have plummeted at their fastest rate since the financial crisis, it was reported last month, although experts disagree on how damaging the impact of the pandemic could be on the housing market, with experts predicting price falls of between 3% and a worst case scenario of 30%.
But the increase in divorce enquiries could be a surprising route for the housing market to recover, depending on whether these initial enquiries are finalised and houses are subsequently put up for sale.
“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,” said Forrester.
“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.”