Property supply was falling even before the coronavirus hit, while any accepted offers could now be withdrawn after the outbreak of the virus, reports suggest.
Analysis by property website Home.co.uk found supply of new sales stock was down 2% annually across the UK in February, and this, combined with already low stock levels, pushed average asking prices up 1.1% on a monthly basis – the largest rise over a month since July 2015.
Properties are selling faster, though, with typical time on the market for sales properties in England and Wales at 111 days, equal to that of March 2019.
In the rental sector, Home.co.uk warned supply was down 17% annually.
Doug Shephard, director of Home.co.uk, claimed: “For the time being, Brexit hysteria has been replaced by coronavirus hysteria but the British property market marches on stoically nonetheless.”
Separately, analysis by removals and conveyancing comparison website reallymoving.com predicted house price growth of 5.9% between March and May according to quotes requested on its website.
This is based on offers accepted on listings between December and February but comes with the caveat that many deals could collapse in the coming weeks and months due to the virus.
Rob Houghton, chief executive of reallymoving.com, said: “Buyers returned to the market in their droves in the New Year and this activity has clearly translated through to higher house prices across the country between March and May, but now we are facing another potentially prolonged period of uncertainty due to the deepening coronavirus crisis.
“The current situation is unprecedented but we know from past events such as the global financial crisis in 2008 that when people were worried about their jobs and their pensions, they tend to withdraw from making big financial decisions and avoid taking on new debt.
“It’s too early to say the extent to which the property market will be affected, and the Bank of England’s emergency 0.5% interest rate cut should help mitigate the impact, but consumer confidence is fragile and I expect we will see a proportion of deals collapsing and a short-term drop in prices by late spring or early summer.”
By MARC SHOFFMAN
Source: Property Industry Eye