House Price Gloom for Sellers, but Delight for Buyers

Property experts predict an immediate future for the housing market shrouded in gloom and doom as the coronavirus lockdown lifts.

Researchers and analysts let loose with data have no idea where prices will end up. The depth of how far the market is likely to fall ranges from a worst-case scenario of 13% from the think-tank Centre of Economic and Business Research (CEBR) to a more palatable drop of 4% from a survey of surveyors. 

Posh people’s estate agent Savills expects a 5% drop, while rivals Knight Frank believe house prices will fall 7% and claims values have already collapsed 5% since March.

Lucian Cook, Savills’ head of residential research, said: “We expect newly agreed deals to take time to rebuild as buyers gradually rebuild confidence. More immediately, things like viewings and mortgage valuations will rely on homeowners being comfortable with measures put in place to protect their safety.”

Perhaps more sensibly, the government’s Office for National Statistics (ONS) has suspended the official house price index for as long as the coronavirus pandemic casts a shadow over the market. 

The pundits do agree the market will take a knock in the next few months and that buyers with cash in hand are more likely to negotiate a good deal. That seems good for landlords looking to expand their portfolios with some bargain basement buys but not so good for sellers. 

Fixing a property’s price in the current market is difficult, even at auctions. Auction House UK, which has 36 auction rooms, is seeing sales at 60% of normal levels.

“Many properties sell for well above their guide prices. In the last few weeks, 10 bidders pushed a three-bedroom terraced house in London guided at £375,000 up to £553,000,” said a spokesman.