The UK’s coronavirus lockdown in March of this year effectively froze the housing market. The government urged buyers and sellers not to hold viewings, nor to move unless ‘reasonably necessary.’ The result was half the number of transactions in April compared to the same month last year.
Now, as restrictions begin to lift, house viewings are possible once more – whilst maintaining social distancing rules. Surveyor valuations can restart, and removal firms too will be hoping for the surge of pent-up house buying some areas of the industry are predicting.
So, what does the rest of 2020 hold for the housing market? What can we expect in 2021? And what do you need to know if you’re thinking of making a move?
Forecasts for 2020 are unclear
At the start of the year, the market was picking up again, as Brexit uncertainty eased slightly in the wake of the Conservative’s General Election win. That all changed with the arrival of Covid-19.
It’s clear that coronavirus will remain a part of our lives for some time. But predicting what the easing of lockdown restrictions and a partial reopening of the market will mean for house prices is difficult.
Forecasts for the remainder of 2020 vary and that could make your decision about whether or not to move, that much harder.
Nationwide Building Society, one of the UK’s largest mortgage lenders, confirmed recently that April to May saw the fastest rate of fall in house prices since the 2008 financial crisis. It’s a trend that many see continuing for the rest of the year.
The Centre for Economics and Business Research predicts 2020 prices will be down by 13%. Estate agent Savills, are anticipating a hit to the market ‘more like 5%’.
Elsewhere though, property website Zoopla reports that the numbers of property sales in England have largely rebounded to pre-lockdown levels. Pent-up demand has also meant firmer prices, with the average price of agreed sales 6% higher this week compared to the same week last year.
The report puts that opening surge down to ‘pent-up demand.’ It adds that the ‘rebound in demand is expected to be short-lived.’
Remember that our mortgage advisers are here to help. If you’d like to discuss any aspect of the current market or your decision to move home, please get in touch.
60% of buyers to push ahead, but expect delays
Zoopla suggests that 60% of would-be homeowners intend to push on with their plans to move now the market has reopened. If you still plan to move this year, you’ll need to start early to avoid delays.
The lockdown restrictions that remain in place – including socially distanced house viewings and removals – mean the logistics of moving home are still more complicated than previously.
With a reported backlog in house sales approaching 400,000 you will likely experience delays. This could be a delay in getting a house viewing or processing delays with lenders. Surveyors too are only now able to get out to value houses.
Simon Gammon, the managing partner at Knight Frank’s finance arm, told the Telegraph recently: “Mortgage lending fell off a cliff at the onset of the pandemic as surveyors were unable to conduct physical inspections. Thankfully, surveyors are now able to return to work safely and are working their way through a backlog of applications built up over the lockdown.”
Rate reductions give reason for hope
If you are set on moving home now that the market is open, there are some reasons for hope.
In March, the Bank of England Base Rate dropped to just 0.1%, its lowest-ever level. MoneyFacts confirms that between 11th March and 14th April, average mortgage rates reduced from an overall average of 2.59% to 2.41%.
Jonathan Hopper of Garrington Property Finders, tells the Guardian the post-lockdown market will be a buyer’s market, and that means the chance to haggle.
Understanding your seller – knowing why, and how urgently they want to move – could give you more bargaining power.
Forecasts for 2021 more positive
Although the outlook for the rest of 2020 is proving difficult to forecast, the industry is predicting price growth in 2021.
Knight Frank estate agents forecast a 5% jump in UK house prices by the end of next year. Growth could be as high as 8% for prime Central London property.
Savills meanwhile forecast average growth between 4% and 5%.
If you are weighing up the pros and cons of a move now compared to holding off until next year, get in touch. Our experts can guide you through all the available options, helping you make the decision that is right for you.
Changing priorities
Finally, the coronavirus pandemic and subsequent UK lockdown look set to have unexpected consequences on the market too.
The Guardian reports that the lockdown has altered the types of properties people are looking for and you might see this reflected in the price of the house you’re interested in.
There has been increased interest in rural areas and smaller towns. Savills put this change down to households adjusting to life working from home.
This is Money quotes Rightmove director Miles Shipside as saying that he expects high demand to boost the values of properties with home offices or large gardens. The possible continuation of remote working post-lockdown could mean that good transport links become less crucial than they were before the pandemic.
Get in touch
If you would like to discuss any aspect of the current housing market or the possibility of moving home, get in touch. Please email hello@fingerprintfp.co.uk or call 03452 100 100.
