Coronavirus: House prices may not recover from lockdown slump for 11 months
Surveyors expect an initial downturn in prices as the market gradually reopens with lockdown restrictions beginning to be lifted.
John-Paul Ford Rojas, business reporter
Business reporter @JPFordRojas
A woman walks past adverts in the window of an estate agent in London on August 17, 2016
AFP / DANIEL LEAL-OLIVAS (Photo credit should read DANIEL LEAL-OLIVAS/AFP via Getty Images)
From computers and cars to carpets and food, Britain's decision to leave the EU is beginning to hit consumers in the pocket, having already spread uncertainty through the property market. There are fears over the UK housing market, but deflation is more of a concern than price rises in this key sector. Figures released Monday showed that residential rents for new lets in London had fallen for the first time in six years. In addition, homeowners have seen the value of their property rise on average by just 2.1 percent in the year up tol August, a slowdown from the breakneck growth of recent years, according to property website Rightmove.
RICS said housing market activity collapsed in April
House prices will take nearly a year to recover from a slide caused by the coronavirus lockdown, according to an industry poll.
Surveyors expect that prices will fall as the market slowly begins to reopen following restrictions imposed in March to curb the spread of COVID-19.
They are not expected to return to pre-lockdown levels for 11 months, according to the report from the Royal Institution of Chartered Surveyors (RICS).
File photo dated 14/10/14 of estate agents signs.
'Pent-up demand' in housing market
That is slower than the expected rebound in sales levels, which surveyors expect to recover in around nine months.
The monthly update from RICS also said 80% of surveyors had reported buyers and sellers pulling out of transactions during April as the lockdown effectively closed the housing market.
"Looking further out, there is a little more optimism but the numbers still suggest that it will be a struggle to get confidence back to where it was as recently as February.
"Moreover, whether this can be realised will largely depend on how the pandemic pans out and what this means for the macroeconomic environment."
The RICS poll's headline house price balance fell to -21 in April from +9 in March.
It found that three quarters of surveyors expected prices to fall when the market reopened, with 40% predicting a drop of more than 4%.
A measure of new instructions to sell a property slumped by the most since the survey began in 1999.
Restrictions on the property market and construction sector, designed to combat the spread of coronavirus, began to be relaxed this week.
New guidance for England includes the green light for property viewings in person and visits to agents for both sales and rentals.
Estate agent Savills has said it expects to see house prices fall by 5% to 10% in the shorter term before recovering.