UK house prices dipped during the coronavirus lockdown as experts warned the housing market was barely functioning due to the restrictions.
The latest data from Rightmove showed that the average price of property coming to market dipped 0.2 per cent to £311,950. In April last year UK house prices increased 2.1 per cent.
However, Rightmove said recent statistics were not “meaningful” as there is not currently a “functioning market” due to the lockdown. New sales were “almost impossible”, the company said.
“You do not have a functioning market when buyers can’t buy and sellers can’t sell, and so the focus needs to be on what is required to help the market recover once the lockdown can safely be eased,” Rightmove said.
The research showed that existing sellers have largely remained on the market, with total available stock for sale down 2.6 per cent since lockdown was enforced on 23 March.
Miles Shipside, Rightmove director and housing market analyst, said: “Agents report that there is good co-operation, with both buyers and sellers keen to hold deals together.
“While some buyers may express concern over the possibility of short-term dips in house prices, many are taking the longer-term view and living up to their commitments to proceed.
“This is being helped by mortgage lenders extending the life of existing mortgage offers by three months, and new legal rules on flexible completion dates.”
Former RICS residential chairman Jeremy Leaf said the survey confirmed what firms are seeing “on the ground”:
“Our offices may be closed but the market is anything but quiet. Buyers and sellers are pausing, not cancelling sales, or listings, while continuing to access websites readying themselves for when lockdown restrictions are eased.
“But the market cannot re-start in isolation. We need surveyors to work with lenders, agents, and solicitors to ensure successful transitions as well as continuation of social distancing and safe visiting”.
There has been an abrupt turnaround from the best start to a year since 2016. Pre-lockdown sales agreed in the year to 23 March were up 11 per cent on the same period last year.
However, potential buyers and sellers are still planning for the future. Visits to Rightmove dropped 40 per cent when the lockdown was announced, however the platform’s sold prices section has recovered more quickly since the restrictions were implemented.
Property firm Knight Frank said that the market would require urgent government stimulus in order to get it functioning again.
According to new research from the firm, the lockdown will result in 526,000 fewer house sales in 2020, a reduction of 38 per cent on 2019.
It also expects lenders to approve 350,000 fewer mortgages as a result of coronavirus, including 150,000 to first time buyers.
In order to get the market moving quickly, Knight Frank said the government should introduce a holiday from Stamp Duty and extend the Help to Buy scheme to boost consumer confidence.
By Jessica Clark
Source: City AM