How will coronavirus affect the property market
September 3rd, 2020
The UK property market is currently enjoying a mini boom since reopening after the lockdown, but experts believe house prices could fall later this year.
Here, I try to explain what’s happening to property values and offer some advice for those looking to move.
What’s happening to the property market?
Property markets across the UK are now open again, meaning estate agents are conducting in-person house viewings and buyers are able to move home once more!
All UK governments have also temporarily cut stamp duty. This means buyers could potentially save up to £15,000 in tax if they move home before next April.
The cut is designed to reignite the property market in the wake of COVID-19, though there are signs that the wheels were already beginning to turn. The property portal Rightmove reported 175,000 ‘missing’ sellers between March and May, but says it saw an ‘unexpected mini-boom’ in June after the market reopened around the UK. This resulted in the number of homes coming on to the market rising significantly.
How have house prices changed?
It’s too early to tell exactly what impact coronavirus will have on house prices, and it’s likely that the figures we see in the coming months will fluctuate significantly. The most reliable barometer of house prices is the Land Registry’s UK House Price Index, but this was suspended due to too few transactions taking place.
Rightmove relaunched its own index last month, reporting that asking prices have increased by 2.4% compared to the period before the lockdown, to reach a record high of £320,265. While Rightmove’s data gives an indication that sellers are asking more for their properties, its conclusions are based on asking prices rather than sold prices, so it’s difficult to get a handle on how much buyers are actually paying.
Other indices have reported mixed results. Nationwide says house prices fell by 0.1% year-on-year in June, while Halifax found they increased by 2.5%.