I found this very interesting article on the Which website that discusses whether or not Coronavirus will affect house prices, check it out and let me know what you think!…
Will coronavirus affect house prices[/caption]
Discover what the outbreak means for buyers, sellers and homeowners By Stephen Maunder2 Jun 2020
Buyers and sellers are tentatively returning to the market in England, but experts believe house prices could fall this year as economic uncertainty continues in the wake of the COVID-19 outbreak. Here, Which? takes a look at what could happen to house prices as the market emerges from the lockdown, and offers advice on making an offer on a property in these uncertain times.
What’s happening to the property market? On 14 May, the government eased some of its stay-at-home measures in England, meaning the property market could reopen. This means estate agents are now conducting in-person house viewings again and buyers are able to move home once more. Rightmove says traffic to its website returned to pre-lockdown levels on the day the market reopened, with 5.2 million visitors. It may take some time for sales figures to get back to the numbers we’re used to seeing, however. Just 11,000 properties were listed for sale on Rightmove in the week following the market reopening, down 65% on the same week last year. A new survey by Zoopla, meanwhile, found that 41% of home movers are now putting their plans on ice. Last year, 1.175m house moves were recorded in the UK. The agency Knight Frank predicts 734,000 moves this year, while Savills places its estimate in the range of 566,000 and 745,000.
How have house prices changed? It’s far too early to tell exactly what impact the coronavirus will have on house prices, and it’s likely that the figures we see in the coming weeks and months will fluctuate significantly. The most reliable barometer of house prices is the Land Registry’s UK House Price Index. The most recent data only goes up to March, when overall house prices fell by 0.2% month-on-month but grew by 2.1% year-on-year to reach £231,855. This timeframe isn’t particularly useful in helping us understand the full impact of coronavirus, as it covers transactions that would have been agreed before the government introduced its stay-at-home measures. When it comes to more up-to-date information, the picture remains unclear. Rightmove released its monthly asking price index without a headline figure in April and May, as it said there were too few properties being listed to provide a calculation. Nationwide’s index reported a 1.8% year-on-year increase in house prices in May, but said prices had fallen by 1.7% month-on-month as the number of house sales and mortgage approvals suffered a sharp decline.
House price predictions Knight Frank forecasts that UK prices will fall by 3% this year, but then bounce back by 5% in 2021, in line with its predictions around the economy as a whole shrinking this year. Savills has offered two different predictions depending on the coronavirus outcome. The first forecasts a 5% drop in prices this year and a 5% rise in 2021, while its second forecasts a 10% fall this year and a 4% rise in 2021. In its interim financial statement, Lloyds Banking Group (which includes Bank of Scotland and Halifax) said it has been working on the assumption prices will fall by up to 5% this year, before recovering by 2% in 2021. Zoopla expects that after an initial boost, buyers and sellers will ‘start to exert greater caution’ in the coming weeks. It says a fall in mortgage options mean first-time buyers ‘may need to find more equity to put into purchases, or step back from the market’.
Should you offer below the asking price? If you were looking for a home before the lockdown and are now resuming your search, you might be in a good position to grab a bargain. As the market gets moving, buyers may look to test the water by offering below the asking price for properties to see if they can tempt sellers amid uncertainty over house values. As we mentioned earlier, it is likely that house prices could take a small dent this year, so if you’re thinking of moving now it’s important to be aware that you might not see any financial rewards in the short term. When considering how much to offer, do your research and remember that the estate agent works for the seller so will be looking to get as high a price as possible. If you’re unsure, consider taking advice from another agent or specialist buying agent.
How will house viewings work? During the lockdown, estate agents began offering video house viewings, and these will still play a part. The government’s latest guidance says buyers should use virtual viewings to filter properties, and only view homes in-person once they’re seriously considering making an offer. In-person viewings must follow social distancing measures. You must wash your hands when entering homes and avoid touching surfaces. If social distancing isn’t possible, both viewers and agents should consider wearing a face mask.
Is it possible to get a good mortgage deal? Since the lockdown began, the number of mortgage deals on the market has halved, but there are still plenty of good rates out there – especially if you have a bigger deposit. Data from Moneyfacts released earlier this month showed that overall average mortgage rates were at the lowest levels since it began keeping electronic records in 2007. Buyers with deposits of 5% and 10% have been hardest hit by deals being withdrawn, with nine in 10 low-deposit mortgages falling by the wayside. Now the market has re-opened and in-person mortgage valuations are permitted, we may see some of these deals return in the coming weeks and months.
We have used our on pictures on this blog post but the article has been taken from the which website.
We personally feel as though there is going to be a considerable fall in property prices, not just in the Telford area but nationally! When the furlough payments stop and some people inevitably lose their jobs ,there will be a flood of properties to the market. Along with the fall in demand, these two factors will drive the average prices of houses in Telford and the UK spiralling down.
We however are currently still active in purchasing property in the Telford area, as the local stock tends to represent good value for money for our investors. We personally will not be slowing down our purchasing activity. If you would like to see some of our previous projects please click here.
If you are considering selling your property in Telford feel free to click here to fill in your details for a no obligation quote in 24 hours. We have the ability to offer full market value in some situations depending the property in question and on your requirements.
To your economic wealth – Ash Anderson