Yesterday one of the UK’s largest lenders Halifax released their monthly house price index, which suggests an annual increase in house prices of 2.8 per cent, with a month on month increase of 0.3 per cent. According to Halifax data, the average UK property price is now £240,677 compared with £234,234 in the same period last year.
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These figures are supported by a positive update from the Bank of England earlier this week, reporting a 7.1 percent year on year increase in the number of mortgages approved for property purchases in January.
Although the impact of Brexit on the housing market appears to have receded for the moment, there have been rumblings this week around how much, if at all, the outbreak of Coronavirus could negatively influence resurgent consumer confidence around moving home.
Could it really make that much of a difference to house prices and activity? Or is it just media hype?
It does appear to be something that commentators around the industry are at least factoring into their thinking.
Commenting on the report, Managing Director of Halifax Russell Galley explains, “The UK housing market has remained steady heading into early spring. Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators. 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, Russell cautions, “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.”
Marc von Grundherr is director of upmarket London estate agency Benham and Reeves and sells some of the most expensive properties in the UK, some of which are purchased by overseas buyers. He observes that there are “Further signs that the UK property market has awoken from its politically induced slumber and is firing on most, if not all cylinders so far this year.”
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Marc continues, “That said, our latest market temperature test on buyer and seller sentiment found that 17 percent of people have already put their current or future plans to transact on hold due to the threat of the Coronavirus. If this hesitation were to spread as rapidly as the cause itself, we could see current growing momentum peter out as market activity stalls once again.”
Ben Johnston, director of off-market property app Houso agrees that, whilst on the surface the motivation to move is there for many, any continued economic uncertainty as a result of ongoing, widespread health fears could put the housing market recovery back several months. “House prices are on a continued upwards trajectory, but it remains to be seen how much of an impact the unexpected hurdle of Coronavirus is going to have on the market” says Ben.
“The Bank of England could feasibly follow the Federal Reserve with a rate cut to help markets and shore up the stagnating economy in an effort to prevent other businesses going the way of FlyBe.”
He adds, “Next week’s Budget gives the Government the chance to stimulate growth further by reducing stamp duty, although this might not be enough until the Coronavirus has stabilised and the threat has diminished. That all-too-precious confidence, which is so important for the market, is hanging in the balance.”
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Tomer Aboody, director of property lender MT Finance is cautiously optimistic: “It is great to see a positive quarter and a year-on-year price rise. This is largely down to December’s election result, with positive vibes since coming out of Parliament.
“Pent-up demand means bidding is high, with sellers taking advantage, and other buyers and sellers holding out to see what possible changes come in the looming Budget before making a move.”
“Let’s hope that these positive trends continue, although buyers and sellers are still conscious that Brexit hasn’t been done yet and therefore the market can still be affected. This, along with the potential for foreign buyers to be hit by currency and stock market fluctuations due to the Coronavirus, which would negatively impact their buying power, could cause an issue with liquidity at the super prime end of the market.”
From a practical perspective, what can you do to reduce any risk of catching any seasonal germs when it comes to buying and selling?
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If it’s your home on the market and you’re expecting viewings this weekend, go out. Now, more so than ever, it’s important to give prospective buyers the opportunity to walk around your property without you being there.
Give all your door handles, both external and internal a thorough spritz with disinfectant or cleaning spray before and after viewings, as these are areas which tend to collect microbes which can live for a couple of days.
If you’re a prospective purchaser and out on viewings, there’s no need to shake hands with anyone.
Hands in pockets and a friendly smile will suffice. If you have multiple viewings booked, wash your hands as frequently as you can throughout the day.
As you walk around properties, avoid touching door handles and flat surfaces, particularly in kitchens and bathrooms.
Of course, whether you’re a buyer or seller if you’re not feeling well, then it makes sense to
postpone any appointments until you’ve fully recovered.
It’s not fair to welcome people into your home or walk around someone else’s if you have a cold – or worse – and share your germs.
That’s not coronavirus hysteria, that’s just common sense.
Follow Louisa on Twitter: @louisafletcher
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