UK Property Prices See Only Modest Declines for March/April 2020
A sluggish performance was the only realistic expectation for the UK housing market throughout the lockdown period. A gradual or sudden spike in property prices was never going to happen while the market was at a standstill, paving the way for doomsday predictions for average house prices for the period.
Some of these negative predictions however may well have proved to be wildly exaggerated, as the latest figures indicate only a slight dip in property values between March and April despite having been predicted to plummet by 10% or more.
Data from Halifax’s house price index showed only a 0.6% month-on-month drop in prices. This means that the average property sold for the March/April period was valued at £238,500, significantly higher than predicted during the early period of the lockdown. More importantly, average house prices (according to the same index) are still up 2.7% compared to the same period last year.
The market may have come to a temporary lowdown due to the coronavirus outbreak, but the figures suggest a pause, as opposed to a complete shutdown.
Government Restrictions and Recommendations
Along with the obvious financial implications of the Covid-19 lockdown, housing market activity was further slowed by official government warnings against in-person valuations, viewings and all nonessential house moves.
As a result, many thousands who were considering relocation chose to wait it out, despite having no idea what may become of their home’s value in the meantime.
If the latest figures are anything to go by, it may not be quite as gloomy a picture as expected. Not only have average property prices dipped only fractionally, but a halt in accelerated property price hikes in many regions could be exactly what some prospective buyers were hoping for.
A Gradual Return to Normal
The Bank of England shares the sentiments of many estate agents and economists, who believe that the easing of lockdown restrictions will lead to a gradual return to normality for both the economy and the housing market.
“After falling, prices are then assumed to rise gradually as economic activity in the UK recovers and unemployment falls,” read an extract of a report from the Bank of England.
Speaking on behalf of James Pendleton estate agents, Lucy Pendleton likewise painted a positive picture for the return of strength and stability to the housing market.
“A bullish picture going into this crisis actually means we are likely to see healthy prices when we return,” she said.
“There will be a period in which vendors test the water, but you can expect them to stand behind valuations they were confident of achieving before the lockdown began. That will be especially true in the capital,”
“There have been a small number of buyers seeking price reductions, but these have been minor skirmishes prompted by opportunists rather than any reaction to the economic realities being faced by vendors”.
Just this week, the UK government has issued new guidance for prospective movers in England, who will be once again permitted to relocate, subject to ongoing restrictions on close contact with other people involved in the process.