Number of homes sold in UK expected to plunge by 60% in next three months

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.

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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 Halifax, the UK’s biggest mortgage lender, has withdrawn the majority of the mortgages it offers through brokers.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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UK house price recovery at mercy of coronavirus, warns Halifax

House prices hit a fresh peak in February, according to Halifax, but the bank issued a warning about the potential impact of the coronavirus outbreak on the property market later in the year.

The UK’s biggest mortgage lender said prices rose by 0.3% in February to a new record of £240,677. The quarterly rate of house price inflation also rose to 2.9%.

Buyers now face prices that are on average £8,000 more than in September last year, when Brexit worries were fuelling a downturn in the market.

Halifax managing director Russell Galley said: “The UK housing market has remained steady heading into early spring. The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.”

However, the February figures reflect property market activity before the coronavirus-inspired falls in stock market values and financial confidence.

Galley said: “Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”

Estate agents reported that coronavirus fears are already hitting some sales. Lucy Pendleton of agents James Pendleton in London said: “Coronavirus impacted our business for the first time on Wednesday, stealing away a sale that was just days from exchanging.

“The buyer worked in the events industry which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely. The hope is this will remain an isolated case but the impact of the virus will become clearer in March.”

Guy Harrington of real estate lender Glenhawk said that until coronavirus gripped the country, the property market had moved into bull market territory, with a rapid market recovery after the election.

“The question on everyone lips now will be whether the damage that coronavirus is doing to other parts of the economy seeps into the housing market, and if so, just how catastrophic will it be?”

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House prices rise in every region of UK for first time in two years

House prices have increased in every region in the UK for the first time in two years, as the Conservative party’s election victory and a more settled economic outlook calmed buyers’ nerves.

House price data compiled by the Land Registry showed average annual house prices increased by 2.2% in December, up from 1.7% in November.

The Office for National Statistics (ONS) said the pattern of falling house price growth since the 2016 EU referendum was reversed last summer in some regions in the north and east of England.

December was the first month since February 2018 that prices increased in all regions and countries.

The average UK house price hit £235,000, £5,000 higher than in December 2018.

David Westgate, the chief executive at Andrews Property Group, said: “For all regions to have delivered positive annual growth for the first time in nearly two years highlights just how resilient the UK property market has been against a backdrop of extreme political uncertainty.”

London prices rose 2.3% year on year in December, which was the strongest rise since October 2017 and a second successive annual increase.

Figures last month revealed that prices increased after a surge in the sales of expensive homes in London’s most sought-after districts. In the past year 185 £5m-plus mortgages were taken out by purchasers, according to figures from the Financial Conduct Authority.

The value of those mortgages was £9.7m on average and the total was £1.8bn, an increase of £200m on the previous year.

The ONS said: “Increased London house price growth may reflect a larger shift in the type of properties being sold than usual, with more sales of very high value properties.”

Westgate said: “While the London figure may have been skewed slightly by sales of extremely high value properties, the capital as a whole appears to have rediscovered its mojo.

“There’s every chance the rebound in sentiment in the capital will cause a ripple effect across the regions.”

Howard Archer, the chief economic adviser to the EY Item Club, said the latest sales data from the Halifax and the Nationwide pointed to a further firming in house prices in January.

“Recent data and surveys suggest that the housing market is changing up a gear after a largely lacklustre 2019,” he said.

“There is certainly a fair degree of evidence that the housing market has got an initial leg-up from increased optimism and reduced uncertainties following the decisive general election result as well as greater near-term clarity on Brexit, with the UK leaving the EU on 31 January with a deal.”

The latest Bank of England data showed mortgage approvals for house purchases rose markedly in December to 67,241, the highest monthly level since July 2017.

Mortgage approvals in December were also most probably lifted by increased confidence and reduced uncertainty among buyers and sellers after the decisive general election result, said Archer.

Average house prices increased over the year in England to £252,000, up 2.2%, and increased by the same amount in Wales to £166,000. Average prices in Scotland were up 2.2%, to £152,000, and 2.5% in Northern Ireland.

In England, Yorkshire and the Humber registered the highest annual house price growth, increasing by 3.9% in the year to December. This was followed by the East Midlands, with a 2.8% increase.

The lowest annual growth was in the south-east, where prices rose by 1.2% over the same period. This was followed by the West Midlands, where prices increased by 1.4%.

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