House prices are set to fall in 2020 as the result of coronavirus – something everyone who was planning on buying or selling a home this year will already know. Whether you had been planning on taking out a mortgage, or were already at the moving stage, Covid-19 put the spanner in the works of most property-related activity in the UK as lockdown measures kicked in in late March.
What can we expect from the property market apart from the widely predicted 10 per cent fall in house prices? Some intriguing new research by Zoopla suggests that the future of the UK property market – at least in the short term – may move online.
The Zoopla Cities House Price Index shows that online browsing of properties is recovering. Although the levels are still down 37 per cent from 1st March, they have increased substantially from the 23rd March when browsing activity plummeted 50 per cent.
The other fact uncovered by the research is that the number of properties available for sale has not fallen as dramatically as some were predicted: only four per cent of homes appear to have been withdrawn from sale, meaning that the vast majority are still being advertised by estate agents.
More positive news: Halifax’s house price index showed that house prices rose 2.7 per cent year-on-year to £238,511 in April; and quarterly, house prices increased by 0.7 per cent. It’s only when you look at price variations on a monthly basis that you see the average price of a house in the UK has dropped by 0.6 per cent.
So, given that both demand and supply are showing signs of recovery, the question remains: how viewings and evaluations be carried out once the lockdown is lifted? Social distancing measures are likely to remain in place in some form at least until the end of the year, so how will the property buying scene cope?
Although internet browsing in itself is no indicator of change – most people begin their home purchasing journey by looking at properties online – it may be that we see a sharp increase in online property viewings and virtual evaluations in the coming months. This could become the brave new world of house purchasing for many during 2020, if the processes for virtual property buying become more established.
Richard Donnell, Director of Research & Insight at Zoopla, said:
‘There is a two-speed housing market at present. Parts of the market are at a virtual standstill as a result of the physical restrictions that have stopped new supply coming to the market and the viewing of homes for sale.
‘However, the online browsing of homes for sale and buyers expressing interest in property have been rising off a low base over the last two to three weeks. Demand for housing is still 60 per cent lower than at the start of March, but we expect interest in housing to continue to improve slowly.
‘Many people have spent more time at home in the last few weeks and some may feel the urge to move and find more space or consider the potential for remote working. This could boost activity in the second half of 2020, but this all depends upon how much the economy is impacted over the rest of the year and the impact on levels of unemployment.’
BY ANNA COTTRELL
Source: Real Homes