The number of homes sold in the UK is expected to fall by 60% in the next three months, according to the property website Zoopla.
There was a 40% drop in housing enquiries for the week to 22 March, the week before the nationwide lockdown, and new sales agreed fell by 15% on the previous week.
The trend is expected to worsen considerably in the coming months. The need for physical distancing and government advice to stay at home mean buyers and renters are unable to view properties in person. Some estate agents have switched to virtual viewings.
The housing minister, Robert Jenrick, said on Twitter: “Buyers and renters should, as far as possible, delay moving to a new house while emergency measures are in place. If moving is unavoidable because you’re contracted and the parties aren’t able to agree a delay, you must follow advice on social distancing when moving.”
Vicky Bibiris, the managing director of Location Location, a north London estate agents, said so far only one sale had fallen through because of a job loss, out of 40 transactions in the agency’s pipeline.
She said that after the EU referendum the number of sales plunged immediately, whereas this time the impact was more gradual. She estimated Location Location could face a 20% drop in transactions in the next few months.
Separate research from the upmarket estate agents Savills said that if a sharp drop in demand was extended until September, total transactions for 2020 would be between 566,000 and 745,000, compared with the 1.027m forecast last November. “Suppressed demand would be expected to return relatively quickly to the market and we could see a return to normal levels by May 2021”, it said.
Noble Francis, an honorary professor at the Bartlett School of Construction of Project Management at UCL, said: “The estate agent sector is very volatile and tends to go hand in hand with the housing market so it suggests that estate agents will be very badly affected unless they can access government help for businesses quickly to sustain themselves until the housing market recovers.”
UK banks have pulled 552 mortgages in the last fortnight, according to Moneyfacts, equivalent to about a tenth of the mortgage market. Halifax, the UK’s biggest mortgage lender, has withdrawn the majority of the mortgages it offers through brokers.
Henry Pryor, a housing expert and former estate agent, predicted some agents would collapse. Referring to the Zoopla forecast, he said: “A 60% fall is probably optimistic given the challenges that lie ahead. Assuming we are once again back to normal by the summer it is unlikely that most buyers will be confident of making what for most is their biggest financial commitment before the new year.”
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