Government urged to help property market recover amid UK house price slump
The government has been urged to provide measures to help the property market to recover, after the latest research warned that UK house prices are set to plunge this year.
The Royal Institution of Chartered Surveyors (Rics) reiterated its call for a stamp duty holiday to encourage buyers , warning that UK house prices were set to plunge this year despite the recent easing of lockdown restrictions.
More than 40 per cent of respondents to the Rics survey said prices could fall by more than four per cent, while 35 per cent said they will be four per cent lower.
In total a net balance of minus 21 per cent of respondents reported a decline in UK house prices in April as the market came to a standstill during the lockdown.
However, the government last night announced it would relax rules to allow estate agents reopen, and let potential buyers view properties.
Rics head of UK Government relations Hew Edgar said: “Rics last month called on the UK Government to explore confidence-boosting measures for the residential market as it reopens, and the data suggests that our proposal for a stamp duty holiday would be a successful change that would boost transactional activity, helping people move home.
“There are, of course, other options available to fovernment as they reopen the market, notwithstanding stamp duty options such as reducing or removing stamp duty for downsizers that would kickstart market fluidity, and we look forward to continuing conversations as the market starts to move again.”
In total 80 per cent of respondents to the survey said both buyers and sellers had pulled out of transactions in April. The agreed sales balance for the month plunged to minus 92 per cent, down from minus 68 per cent in March.
According to the research, 62 per cent of respondents believed a stamp duty holiday would help the market to recover after the pandemic by lifting sales and leaving prices relatively unchanged.
Read more: UK house prices dip in April as coronavirus lockdown brings market to standstill
A net balance of minus 93 per cent of respondents reported a decline in buyer enquiries during April, dropping from minus 76 per cent the previous month.
New instructions also continued to fall, and 96 per cent of respondents reported a drop rather than a rise of new properties being listed for sale, the worst reading on record.
Jeremy Leaf, north London estate agent and former Rics residential chairman, said: ’’This data, though interesting, has largely been overshadowed by the re-opening of the property market yesterday so the next survey is likely to be quite different, bearing in mind the spike in enquiries which followed the announcement.
“Nevertheless, near-term expectations show that we shouldn’t get carried away by this sudden release of pent-up demand.
“Many bigger hurdles remain for homebuyers and sellers, not least in arranging visits safely and securely, as well as ensuring that previous as well as new lending arrangements are in place on the same or similar terms.”
Read more: UK house prices: Experts predict sharp recovery after coronavirus lockdown
Knight Frank head of London residential research Tom Bill said: “We expect UK house prices will continue to decline over the summer as the bad economic news racks up.
“However, the worst of the declines are likely to be behind us and there may be upwards pressure on prices in the final two quarters of the year if, as many expect, economic activity rebounds.”