The economy is moving towards a period of recession due to the current pandemic and the consequential lock down. Property activity, in particular, came to a halt, and experts believe UK housing prices will continue to drop down this year.
Impact On House Prices And Moving
While the government has relaxed some of the restrictions for lockdown since May 18, enabling reopening of the housing market, it might still take a few more months for things to get back to pre-lockdown conditions.
House viewings and moving are allowed along with virtual house visits via Zoom and other video solutions. But the effects of lockdown have been reflected in the drop in average house prices by 0.2% while the same period last year saw an increase by 2.1%.
Further estimates also provide a stark contrast between what used to be a growing housing market last year and the slowing housing market this year. Last year, about 1.175m house moves were reported in the UK. The Knight Frank agency has estimated that the number would be around 734,000 this year, while another agency Savills gave an estimate of about 566,000 to 745,000 house moves this year.
Housing Market Future Predictions
Most estimates by real estate agencies predict a sharp dip in house prices this year and a gradual increase with the start of 2021 and a significant boost in 2022.
Knight Frank predicts a 3% fall in prices by the end of 2020 and a boost of 5% by the end of 2021. Savills has given two different predictions depending on the lasting effects of lockdown. Their estimates put a fall in prices around 5% to 10% this year and a boost by around 4-5% by 2021.
In general, it is expected that following an initial drop in prices, property prices will once again get a boost and increase in value as more sellers will tend to be cautious with their sales.
The current market downturn is primarily due to the global health concern, so if a vaccine is developed soon and the number of reported cases drops quickly we could be confident of a 'V' shaped bounce back.
Current Market Conditions
The current housing market is a buyers’ market. If you are a first-time buyer who has been looking for a home since before lockdown, you might get a good deal if the expert's predictions are correct. First time buyers that did not have their employment impacted by Covid-19 would do well to apply for their mortgage and have their financing in place for fear the banks remove mortgage products again from the market,
As for sellers, now is a testing time and it might be challenging to get a good offer on their home. Many buyers may be reluctant to move considering current conditions - time will tell.
In short, these are unprecedented times for the property market. Knowing when is the right time to buy a house or sell your home is difficult at anytime. Damn near impossible at the moment.