How will Coronavirus affect house prices?

Firstly, let us start by advising everyone not to believe everything they read online and in the papers. Many national media outlets have been quick to publish headline-grabbing articles and opinions from a ‘London-Centric’ perspective, quoting London-based estate agents ‘facts’ and figures. There may be a huge difference in the house prices further South following this pandemic as there is more room for manoeuvre and corrections in those buoyant markets, but overall the lasting effect is likely to be much less dramatic.

Since the housing market re-opened, there has immediately been a lot of activity; Rightmove says visits to its website returned to pre-lockdown levels on the day the market reopened, with 5.2 million visitors and that sales enquiries doubled in the space of 24 hours.

It’s far too early to tell exactly what impact the Coronavirus will have on house prices, and it’s likely that the figures we see in the coming weeks and months will fluctuate significantly. The most reliable barometer of house prices is the Land Registry’s UK House Price Index. The most recent data only goes up to March, when overall house prices fell by 0.2% month-on-month but grew by 2.1% year-on-year to reach £231,855. This time frame isn’t particularly useful in helping us understand the full impact of the Coronavirus, as it covers transactions that would have been agreed before the government introduced its stay-at-home measures. When it comes to more up-to-date information, the picture remains unclear. Rightmove released its monthly asking price index without a headline figure in April and May, as it said there were too few properties being listed to provide a calculation.

No matter what the asking price implications, if you are both selling and buying, it will not affect you too much financially. Most importantly, it is still an active market, with sales being agreed daily and new properties still coming to the market. People still want and/or need to move house and now that mortgage lenders are starting to ease back into action, now is as good a time as any.

Only time will tell what lasting implications the Coronavirus will have on the housing market, as with every other sector of the economy. Leading lenders and national home-moving services are all predicting house-prices will begin to rise again by 2021 in a ‘worst-case scenario’. If you would like to discuss this further or talk more in-depth about any property queries, please get it touch with us.

Sources:

www.rightmove.com; www.which.co.uk; www.gov.uk

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