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House prices expected to soar but nervous buyers may withdraw – Reallymoving

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  • 12/03/2020
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House prices expected to soar but nervous buyers may withdraw – Reallymoving
House prices could grow by as much as ten per cent during the spring as positivity in the market is set to continue, predicts Reallymoving.

 

However, the conveyancer warned that the anticipated growth could be hit if nervous buyers withdraw and sales collapse as a result of the coronavirus.

Average house prices in England and Wales will rise by 5.9 per cent over the next three months, from £291,214 in February to £308,396 in May, it noted.

A minor 0.7 per cent dip in March, based on deals agreed in December, will be wiped out by monthly growth of 4.3 per cent in April and 2.3 per cent in May following a strong market performance in the New Year.

This would take the annual house price increase to around 9.9 per cent in May, although this is slightly distorted by a weak May 2019, according to the data.

Reallymoving noted that the market continued to perform consistently more strongly than a year ago, with nine consecutive months of positive year-on-year growth between August 2019 and May 2020.

“This suggests that some of the pent-up demand built up in the housing market over the last three years is now being released, but the impact of coronavirus could mean this upturn in consumer confidence is short lived,” it added.

 

Expect deals to collapse

CEO Rob Houghton (pictured) said: “Buyers returned to the market in their droves in the New Year and this activity has clearly translated through to higher house prices across the country between March and May, but now we are facing another potentially prolonged period of uncertainty due to the deepening coronavirus crisis.

“The current situation is unprecedented but we know from past events such as the global financial crisis in 2008 that when people were worried about their jobs and their pensions, they tend to withdraw from making big financial decisions and avoid taking on new debt.

“It’s too early to say the extent to which the property market will be affected, and the Bank of England’s emergency 0.5 per cent interest rate cut should help mitigate the impact, but consumer confidence is fragile and I expect we will see a proportion of deals collapsing and a short-term drop in prices by late spring or early summer.”

 

 

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