In the space of one month, demand for homes, newly-agreed sales and house price forecasts have all plummeted and surveyors’ sales expectations for the next three months are at their lowest ever recorded by the RICS market report.
The March lockdown, surveyors fear, will have a significant impact on the housing market for the rest of 2020.
In February, 21 per cent more surveyors expected house prices to rise in the short term, rather than fall.
By March, the outlook for house prices in the coming months had turned negative, with 82 per cent more surveyors saying they thought values would fall.
Almost 40 per cent of surveyors expect house prices to fall further over the next 12 months.
In the next three months, the majority of surveyors expect the number of house sales to decline, while over a 12-month period, this is less negative with just over 40 per cent more surveyors expecting sales to fall further, that those who expect them to rise.
Stamp duty holiday
A stamp duty holiday, said the RICS head of government relations Hew Edgar, was one way of restarting the housing market quickly after the restrictions on movement have been lifted.
“RICS is not an organisation that would call for a stamp duty holiday on a whim, and indeed our view prior to Covid-19 was that it required a full-scale review,” he said.
“As we start to emerge from this crisis, however, it is likely that the finances of potential homebuyers will be under strain, and the burden of stamp duty could put buyers off. For those who can afford to move they may lack confidence in the market, adding to the slow down.
“A stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short term measure.”
The institution’s chief economist Simon Rubinsohn said the negative responses from surveyors over 12 months, as well as three, suggested it would take some time for the housing market to return to normality and households are expected to remain cautious for a while
He said: “Of course, the primary focus of government is at this stage the health of the nation and defeating coronavirus and it may be a little premature to be planning for the economic recovery.
“However, the feedback from the survey does imply that further government interventions both in the wider economy and more specifically in the housing market may be necessary to aid this process supporting businesses and people back into work.”