Now that Estate Agents across the UK are breathing a sigh of relief that they can get back to selling houses, we’re all asking the question…what does the market look like? Is it time to grab a bargain? What could happen to house prices as the market recovers from the Covid-19 pandemic?
Rightmove reported that their website visits are back to pre-covid numbers as buyers scramble to pick up a bargain. On the day the market re-opened they received 5.2 million visitors with a double in the number of sales enquiries within 24 hours. The rental market is also waking up with the highest number of enquiries received since September 2019.
Although things (and people) are moving again, it will be quite a while before we transaction levels back to normal. Last year, 1.175 million transactions were recorded and there have been various forecasts for this year. Knight Frank has predicted 734,000 moves this year and Savills places its estimated forecast between 566,000 and 745,000 moves.
It’s too early to tell what long-term impact the Coronavirus will have on house prices. The data we rely on to give us a true indication of house prices is the Land Registry’s House Price Index and most recent data only goes up to March. Up until this point, house prices had been falling month-on-month, although growing year-on-year to reach £231,855, although this does not help us measure any impact of Coronavirus as the figures were recorded before lockdown.
Figures will likely fluctuate in the coming months and it´s still unclear how we are going to record accurate information. Rightmove said that in April and May, there were too few properties listed to provide an accurate calculation and so released its monthly index price without a headline figure.
House price predictions vary with Savills giving two options of possible outcomes.
|LLOYDS BANKING GROUP||<5%||>2%|
Rightmove say that three things will need to happen in order for the market to keep in recovery mode; low-cost mortgage lending and government incentives will need to continue to be accessible, limiting forced sales and new ways to view houses using technology.
Now is the time to grab a good deal. Those who are in the position to resume house hunting, are now starting to test the water to see how low they can go when putting in an offer. Virtual viewings that started in lockdown are expected to continue as the market reopens and only viewing homes that buyers are serious about making an offer on.
Although lenders have pulled many of their products, there are still many with an appetite to lend if the borrower can put down a considerable deposit.
Buyers who had 5% or 10% deposits have been the most affected with 9 in 10 deals being withdrawn, although this may improve in the near future now that the market has re-opened and valuations are able to be done in person.