Property experts warn that houses prices in the UK are set to fall 7% this year due to the pandemic and the ever-extending lockdown measures.
According to revised forecasts from estate agent Knight Frank house prices and commercial properties are likely to have already fallen by 5 per cent since the beginning of the coronavirus crisis as the market ground to a halt,
After the British government announced a further lockdown which will only be fully lifted by the end of July at the earliest, experts predict a bigger slump than first thought and bigger than the one at the start of April and the start of this month.
3% Decline Forecast
Previously a 3 per cent decline was forecasted but an even greater percentage fall of 7% nationwide has been forecasted. A 5% drop has been envisioned in London.
‘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,’ Knight Frank said.
And added: ‘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.’
I think it would be wrong to assume a continuation of the decline we have seen over recent weeks,’ Knight Frank said.
‘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.’
If the British nationwide lockdown is indeed lifted in July and the housing market can begin to function again, then downward pressure on prices ‘should be limited’.
And in prime London locations where there has been a 5% drop, it’s possible to see prices pick up again in the second half of the year, according to Knight Frank.