Stark house prices warning: Property value set for dramatic £12,000 slump this summer
HOUSE prices in the UK are set for a summer slump, experts are predicting. The prediction has been made based on sold prices in the first quarter.
By EMILY HODGKIN
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Those looking to sell might find cause for concern in news that house prices are set for a slump in the summer. However, those looking to get on the ladder may well benefit from the slump.
How UK housing market may suffer huge price crash this year
Analysis found house prices in England and Wales are on course to fall by 3.8 percent between June and August 2020 based on the values of new deals agreed between March and May.
Reallymoving, a comparion site for the costs of solicitors, surveyors and removals, made the findings.
It claimed the strong market performance seen in the first quarter of 2020 was brought to a halt by the Coronavirus lockdown.
What is more, the decline in average values will be 5.1 percent.
House for sale prices
House prices: UK news - property value set for dramatic summer slump (Image: GETTY)
House prices: Those looking to get on the ladder may well benefit from the slump (Image: REALLYMOVING)
House prices: House prices in England and Wales are on course to fall by 3.8 percent (Image: GETTY)
Based on mix-adjusted purchase price data from over 8,000 conveyancing quotes between March and May on Reallymoving, the average property price will fall from £308,280 in June to £296,485 in August when those deals complete.
This is an average drop of £11,795.
Reallymoving said: "It’s important to note that the assumption of a typical 12-week time frame between exchange and completion could be less reliable than usual as transactions take longer to conclude – and a proportion of deals already agreed prior to lockdown could have since been renegotiated."
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Commenting on the data, CEO Rob Houghton said: “We’ll have to wait several months at least before the true impact of Coronavirus on the housing market becomes evident, but early signs suggest that while prices have fallen and buyers have undoubtedly tightened the purse strings, the initial hit may not be as severe as some analysts feared.
“For sellers now facing a period of great uncertainty and a scarcity of buyers, doing a deal at a reduced price of three to four percent could look considerably more appealing than sitting tight and waiting to see what happens over the next few months.
“Transaction volumes are at half their normal levels and the economy is currently propped up by the Government through the furlough scheme alongside mortgage payment holidays, so although the market is open once again, its underlying health has not yet been tested.
“Levels of unemployment and confidence in the jobs market will be key factors in determining whether the housing market recovers in the autumn with a levelling out of prices or continues in a downward trajectory.”
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It has been claimed the UK housing market may suffer a huge price crash this year.
The director of the Association of Homebuyers, Jonathan Rolande stated house prices could crash if unemployment begins to rise.
He said: “The market has been in hibernation.
“It’s in the recovery but it could go either way.
“It’s whether the money dries up or if unemployment really starts to hit."
Looking at house prices online
House prices: What is more, the decline in average values will be 5.1 percent (Image: GETTY)
Recent analysis has revealed the buy-to-let hotspots across the UK post lockdown.
Online broker Mojo Mortgages has analysed popular buy-to-let postcodes across the UK.
It revealed where the best yield hotspots currently are, and the places to avoid.
There is a clear North/South divide in the findings.