While house prices may dip the market is unlikely to see a significant decline due to the pandemic, Nicky Stevenson, head of associates at Fine & Country, has predicted.
However, she still expects transactions to fall by 25% between 2019 and 2020.
Stevenson said: “It is possible that there could still be a short-term dip in house prices but the market is probably protected from major declines as, unlike previous downturns, this does not follow a spike in house prices, there is a good balance between supply and demand and banks are still prepared to lend, with fixed mortgage rates at an all-time low.”
Prime markets in particular have only seen modest price growth in the past five years, which should prevent significant price falls.
According to Zoopla, 373,000 sales agreed were placed on hold before the lockdown.
Stevenson added: “Assuming that a proportion of those will fall through and on the understanding that lockdown is loosened from June, and normal sales activity resumes over the summer, we estimate that just under 880,000 homes will sell in 2020 across the UK, 25% fewer than 2019.
“Based on this, we can assume that August looks set to be a very busy month for agents.”
While consumer confidence is expected to recover, this is likely to be a slow process, as it could take time for people to feel secure in their jobs and build confidence.
For some however, being stuck inside with the lockdown could be the impetus needed to move house.
Stevenson reckons we are likely to see behavioural changes as a result of the pandemic.
She said: “Covid-19 will likely leave a legacy of consumer behaviour change.
“Greater importance may be placed on homes having outside space and the premium already established for homes within close proximity to green space increasing.
“Lockdown has proved working from home is viable and even convenient. We do not envisage the death of the office, with the social benefits too great.
“However, working from home may become more common, shifting the relative importance of commute times, broadband speeds and home offices,”
Annual house price growth reached 1.3% in England and Wales in March, and the average price of a property sold was £232,648.
Mortgage approvals saw a quarterly increase of 0.8%, mortgage lending rose 1.0% and the average time to sell a property was four days shorter.
This post has originally been featured in Property Wire.