It comes as the lockdown measures put in place by Prime Minister Boris Johnson on March 23 are set to gradually lift, with buyers and renters able to continues their planned moves. Knight Frank, estate agent, said to the Daily Mail that according to revised forecasts, property values have fallen by five percent since the beginning of the outbreak. The agency predicts a bigger slump than it thought at the beginning of April, when it assumed restrictions would be lifted at the end of May.
It has now penciled in a seven per cent fall across the country, compared to a previous 3 per cent decline, and a 5 per cent fall in prime London locations, where it initially had forecast no change since they are already 20 per cent lower than in 2014.
Knight Frank said: “Since Sunday night it’s become clearer that some lockdown measures will remain in place into July and that social distancing rules governing day-to-day life, including property transactions, may remain in place beyond that.
“If we allow for the fact that some asking prices have come down since March, then we might conclude that prices are off by 5 per cent already since the beginning of the crisis.
“Five per cent seems like a reasonable starting point, and it is increasingly clear that prime London’s five-year decline doesn’t means it is immune from price falls.”
However, the agency does not expect prices to keep falling at the same speed as they have in the past couple of months, citing growing evidence that sellers were not accepting lower offers so often.
Knight Frank added: “I think it would be wrong to assume a continuation of the decline we have seen over recent weeks.
“The key question is will vendors accept discounts of more than 5 per cent?
“Some will, but there is growing evidence from the widening spread between average offers and the offers that are being accepted that many simply won’t.’
The Bank of England, however, has forecast a bigger slump.
It said it expects house prices to fall 16 percent due to the coronavirus crisis and lockdown, before gradually recovering as economic activity picks up.
The forecast came in the Bank of England’s Financial Stability Report last week, alongside its Monetary Policy Report and interest rates decision.
They also said prices would be pushed lower by rising unemployment, but propped up in part by ‘persistently’ low mortgage rates.
It comes as Housing minister Robert Jenrick said in a statement that buyers and renters may resume their searches from estate agents while abiding by social distancing.
It read: “I am announcing new guidelines to allow the housing market to resume.
“Our clear plan will enable people to move home safely, covering each aspect of the sales and letting process from viewings to removals.
“This critical industry can now safely move forward, and those waiting patiently to move can now do so.”
Published at Wed, 13 May 2020 01:06:00 +0000