The recent impact of the coronavirus has seen the housing market slow down.
This month’s housing index includes the price data from last month, an event as unprecedented as coronavirus has shifted our focus.
Two weeks into the pandemic, we’re now in a stronger position to assess its near-term market impact.
The COVID-19 virus has had a rapid impact on housing demand which is 40% lower in just one week.
Unknown shocks and curves tend to exert a bigger impact on transactions than house prices in the short term. Government measures to stabilise employment levels and safeguard incomes should minimise the number of property owners forced to sell – which traditionally pushes down prices.
Agents across the UK are desperately trying to keep up the sales pipeline and offer a more virtual dialogue with vendors and applicants.
Zoopla research and insight Director, Richard Donell said
“These are unprecedented times for the global and UK economies. Buying a home is a major financial decision and, perhaps unsurprisingly, Zoopla’s latest data shows new buyer demand has registered an immediate downturn. The impact on completed sales has been less pronounced but fall through rates are rising. There is a 3-5 month lag between demand coming into the market and completed sales that drive agency revenues.
While sales completions are set to remain weak into Q3 it seems likely that demand will start to recover slowly once restrictions are lifted. Much depends upon any longer lasting economic impact. While the industry has gone into lockdown along with the rest of the country it is important to plan for when the tide starts to turn. While restrictions in the worst affected parts of China have just been lifted, data shows that demand for housing started to increase a few weeks after the start of the lockdown.
We expect UK households to remain engaged with housing online over this time, even though they cannot necessarily view homes in the short term. More browsing of property means vendors may be better served keeping homes on the market while agents continue to promote their brands online.”
Before the outbreak of the coronavirus, cities in the North and Midlands were continuing to outperform the rest of the country in transactions processed during the month. The North East of England alone had seen a house price growth of over 1%, whilst Manchester was up by 4.9%.
Indeed Government measures to help businesses and employees has been something that we’ve never seen before, with £3.3bn promised in business interruption loans. The possibility of a three month mortgage holiday, will hopefully reduce the number of homeowners who default on their repayments.
To see how Seven Keys are handling the situation and how we can help get your property on the market, click here.