Government regulations, put in place to stem the spread of the Coronavirus, have halted the UK property market. Mortgage companies have stopped offering new mortgages to homeowners and the Prime Minister has banned house viewings. With the lockdown likely to continue for the short foreseeable future, market analysts have warned of a collapse in sales. They tempered the stark warning, however, by saying they only expect a 3% drop in prices.
Social distancing laws have been introduced as a means of preventing further spread of the pandemic. People are being encouraged to work from home, and only essential shops and businesses have been allowed to stay open. Pubs, clubs, restaurants, and bars have all been closed.
On March 24th, the government announced that estate agents and letting agents must stop giving property viewings. They also announced that no house moves should go ahead unless they were essential. Agents, buyers, and vendors were unsure what this meant for those that have completed contracts and are waiting for a moving date.
Official guidance suggests that buyers and sellers should look to agree to a delay in their move until a time when lockdown measures are no longer in place. Even the British Association of Removals advised its members to cancel any removals that are not yet in progress.
In light of the fact that fewer people will be moving property, and possibly to counteract diminished staff numbers caused by self-isolating employees, some mortgage companies have put a hold on offering new mortgage deals.
The Nationwide Building Society withdrew home loans except for those with a 25% deposit. Barclays soon followed suit.
HSBC did state that their mortgage arm was business as usual. However, the lender introduced daily limits on new mortgage lending and applications with low deposit values would be put on hold.
Real estate consultancy firm Knight Frank warned that the knock-on effects of Coronavirus would lead to a significant drop in house sales. They estimate that 700,000 houses will sell this year, compared to 1,175,000 last year. The company further warned that this would have a detrimental effect on companies like real estate agents and letting agents. They do not foresee a major drop in prices, however.
In fact, the consultancy firm has said that they expect prices to fall 3% in 2020, but believe they will bounce back 5% in 2021. They based their forecast on predictions that the UK economy will shrink 4% this year before recovering 4.5% next year. It also takes into account the fact that house prices had started to recover at the start of the year before being pegged back by the pandemic.
The property market is all but in lockdown at the current time. The government is set to review social distancing laws on April 13th, but experts expect the lockdown to continue. Unfortunately, PropertyBuyer.co.uk is unable to conduct property valuations with home visits at this time and until restrictions are lifted. Contact us with your name and number, or email address, and we will attempt to work with you with some alternative methods.