Average house prices in England and Wales are predicted to fall by 3.8% between June and August 2020 based on the values of new deals agreed between March and May.
Price comparison site reallymoving said the strong market performance seen in the first quarter of 2020 was brought to a shuddering halt by the coronavirus lockdown the decline in average values down to 5.1% when adjusted seasonally.
Based on mix-adjusted purchase price data from over 8,000 conveyancing quotes between March and May the average property price will fall from £308,280 in June to £296,485 in August when those deals complete.
Collected at the beginning of the property purchase process, when buyers agree a deal and seek conveyancing quotes, the data provides one of the earliest snapshots of the immediate impact of lockdown on the property market and confirms that confidence in property values and the wider economy has reduced.
Rob Houghton, CEO of reallymoving, said: “We’ll have to wait several months at least before the true impact of coronavirus on the housing market becomes evident, but early signs suggest that while prices have fallen and buyers have undoubtedly tightened the purse strings, the initial hit may not be as severe as some analysts feared.
“For sellers now facing a period of great uncertainty and a scarcity of buyers, doing a deal at a reduced price of 3-4% could look considerably more appealing than sitting tight and waiting to see what happens over the next few months.
“Transaction volumes are at half their normal levels and the economy is currently propped up by the government through the furlough scheme alongside mortgage payment holidays, so although the market is open once again, its underlying health has not yet been tested.
“Levels of unemployment and confidence in the jobs market will be key factors in determining whether the housing market recovers in the autumn with a levelling out of prices or continues in a downward trajectory.”