After a post Brexit bounce (well the withdrawal agreement bit) enjoyed by the housing sector during January and February, the brakes were well and truly applied in March on an unprecedented, national scale from a transaction perspective.
The only answer to our headline at present is no one can really know for sure, it’s just too early to say for certain, the property market being frozen in time is an alien concept and has never occurred in peacetime. The conventional wisdom here is that as proceedings edge toward familiarity, everything will resume as before although at a potentially reduced pace. With people continuing to become unwell, or isolating, or having their income impacted, the remainder of the year is hard to predict, some will postpone a move indefinitely while others will want to take advantage of historically low mortgage rates. Fewer transactions are almost inevitable in the short term before confidence is likely restored, a downward trajectory on pricing is doubtful due to stunted stock levels initially, although this is a complete unknown. In the short term, we expect stagnation from a price perspective and indexes are likely to be unreliable and volatile due to the erratic number of sales and completions.
Property Market Forecasts
Unlike the financial crisis of 2008 where circa 20% was wiped from values across the market over a twelve to twenty-four-month period due to rapidly rising property prices and a banking crisis, this is an entirely new and mysterious battle to overcome for almost everyone. Pausing the market suggests it may continue as it had been performing prior to the pandemic, however, the estimated contraction of the economy could alter prices to a degree. As ever, supply and demand in various locations will determine the outcome. Nationwide reported a 1.6% rise in prices across the UK for the first quarter of the year, much of which was made up by the Northern regions of England, the Midlands and Wales.
Brexit’s Impact on the Property Market
If the Brexit saga taught us anything, it is the UK property market is a robust force. Many large industry-related companies and economists still feel there will be a flat-lining of prices, as was predicted at the outset of the year, with the lack of growth made up for in 2021. Aspects that would help reignite the sector include; continuing low-cost mortgages, innovative house buying procedures such as virtual 360-degree tours and possibly a government incentive like extending help to buy scheme or adjusting stamp duty thresholds for a period.
Government musings suggest, due to its economic contribution the property industry will be one of the first to restart post lockdown.
Social distancing measures can be adhered to with a planned and pragmatic approach (as the Your Conveyancing Solutions panel have highlighted) within the businesses that contribute to the overall make up of the property machine, so with sensible processes in place and once estate agent branches and conveyancers offices reopen, coupled with mortgage lenders offering attainable products again and physical valuation surveys taking place, we expect no lasting damage to asking prices.
If you are in the process of buying or selling, please refer to our related article ‘Coronavirus Impact on Conveyancing’ to see what is happening generally with moving at this time.