House Sales: A Buyer’s Market but Many Sellers Standing Firm
The cost of residential property may have plummeted to its biggest drop in 11 years – but buyers aren’t necessarily getting the bargains they were hoping for.
Many buyers, who were due to go through with a purchase pre-lockdown, still paid close to February/March asking prices. Online property portal Zoopla estimated around 450,000 transactions were suddenly halted when lockdown commenced.
Valuations have dropped by 1.7 per cent from March to April according to the latest Nationwide Price Index. It means the average property is now £4000 less than pre-lockdown, at £218,902. Many analysts are predicting a five per cent drop in prices by the end of the year.
Desperate vendors did reduce costs during lockdown, and gazumping has taken place, but many sellers, it seems, are sitting waiting to see if the market will pick up again.
And many buyers too remain cautious. Nationwide market research found that 12 per cent of those they interviewed didn’t plan on getting back into the property market for around six months. They preferred to wait to see what the ramifications of Covid-19 were on jobs and other economic factors.
No ongoing mortgage worries until November
The idea that the property market, like the economy, will bounce back quickly in a sharp V – rather than an extended U shape – is shared by a number of property commentators. The fact the government has now extended the mortgage holiday to October for those struggling to pay due to coronavirus, has only served to confirm these expectations.
At the same time the Job Retention Scheme and Self-Employed Grant has also helped saved millions of people from having to sell-up by backing up the economy in general. Meanwhile, mortgage interest rates remain favourable for buyers, as well as those looking to re-mortgage.
There has also been a huge rise in online interest when it comes to property purchases in recent weeks. One commentator mentioned the lifting of the first phase of lockdown and the ensuing ‘buyer tsunami’ was like ‘opening the flood gates.’
House prices still ‘up’ on previous year
It’s worth remembering too that house prices are still rising year-on-year, with the average property worth 1.8 per cent more than in April 2019.
Suspicions that buyers’ preferences have changed when it comes to house priorities, have also been confirmed by a Nationwide research. They found that 34 per cent of buyers now wanted a garden where they could go and sit were lockdown to become a temporary feature of everyday life again. Other priorities were for better energy efficiency (30 per cent) and – presumably for those who plan on working from home more often – a super-fast broadband speed (20 per cent).
Get in touch!
If you are planning on buying or selling property over the coming months then the team here at Griffin Residential can talk you through the new social distancing measures in the property sector. We can also give you an up-to-date and honest report on how the property market is performing in your area right now. You can call us on 0345 561 0050 or drop us an email at [email protected] and we will get back to you ASAP.