Despite potential fluctuations in house prices throughout the COVID-19 lockdown, vendors will likely stand behind valuations they were confident in prior to the crisis, according to independent estate agents James Pendleton.
Halifax’s April House Price Index reported a month-by-month fall of 0.6%, but Lucy Pendleton, property expert at James Pendleton has said this should not be a cause for concern.
She said: “Volumes were too thin last month to make this slight monthly decline statistically significant.
“If this data is worth anything at all, it actually betrays a story of strength.
“The annual growth rate remains nearly 3% and this is yet more evidence of how well the market was doing before the pandemic struck.
“This fact will play a significant role in what prices look like when the market restarts.
“A bullish picture going into this crisis actually means we are likely to see healthy prices when we return.
“There will be a period in which vendors test the water but you can expect them to stand behind valuations they were confident of achieving before the lockdown began.”
She added that buyers looking to capitalise on uncertainty have been the exception, rather than the rule so far: “There have been a small number of buyers seeking price reductions but these have been minor skirmishes prompted by opportunists rather than any reaction to the economic realities being faced by vendors.”
This return to strength will be influenced by the prevalence of remote and home working in certain areas, as well as the governments actions and support as the crisis continues and afterwards.
Pendleton said: “London will be insulated to a large degree because its white-collar workers have been able to keep working at home.
“With housing supply in the capital still short, their buying power will be the last to be dented as part of a much more enduring economic downturn, if indeed one comes to pass.
“That confidence is underpinned by the pick up in activity and rising house prices that were buoyed by a Boris Bounce in January and February.
“Judging how quickly to bring furloughed workers back will be the challenge for agents.
“The industry would much prefer a quick jail break rather than a long walk to freedom.
“Given how the collapsing Stamp Duty revenues will impact the tax take, the hope is that Boris will soon give the go ahead for agents to get back to work imminently.”