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House prices rise to new records but volatility awaits ahead as coronavirus strikes

‘What property might have done without coronavirus’: Optimistic sellers pushed asking prices to a new record but the  crisis is set to chill the market againAverage asking prices rose by £3,226 in just a month to a new record £312,625 Annual price of growth stood at 3.5%, the fastest since December 2016 But Rightmove’s index covers a…

‘What property might have done without coronavirus’: Optimistic sellers pushed asking prices to a new record but the  crisis is set to chill the market again

  • Average asking prices rose by £3,226 in just a month to a new record £312,625 
  • Annual price of growth stood at 3.5%, the fastest since December 2016 
  • But Rightmove’s index covers a period up until 7 March
  • That means the pick-up could now be affected by the spread of coronavirus
  • Coronavirus symptoms: what are they and should you see a doctor?

By Camilla Canocchi for Thisismoney.co.uk

Published: | Updated:

House asking prices rose to a new record high last month, online estate agent Rightmove said, but this could be the last set of positive figures for a while as the coronavirus outbreak wrecks havoc on the economy. 

The latest Rightmove house price index, which covers a period up until a week ago, shows average asking prices rose by £3,226 in just a month to a new record £312,625, as they continued to benefit from a post election boost in market activity.

The annual price of growth stood at 3.5 per cent, the fastest rate since December 2016, with strong buyer demand and a lack of supply continuing to push prices higher. 

The latest Rightmove house price index covers a period up until a week ago

However, this rate of growth is unlikely to hold up next month, with volatility expected throughout the summer as the economy feels the hit from the coronavirus outbreak. 

Rightmove director Miles Shipside said: ‘The market has been waiting for several years for a window of certainty, and 2020 seemed set to be the year when many would look to make a move and satisfy their pent up housing needs. 

‘However, the current fast pace of the housing market could now be temporarily affected by the spread of the Covid-19 coronavirus. We expect that housing market statistics, like other economic indicators, could be prone to volatility over the spring and summer.’    

The housing market saw a significant bounce in the lead up and immediate aftermath of the general election, with prices and sales rising, and mortgage approvals for homebuyers soaring to their highest levels in four years in January. 

Rightmove said the market fundamentals remained ‘broadly sound’ but it was now hard to predict how the post-election boost in market activity will be affected by the unknown impact of coronavirus.  

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said they saw only a few cancelled sales and listings, but that viewings were ‘down significantly’ as buyers and sellers take a ‘wait and see’ approach. 

‘This is yet another housing survey showing what might have been had the virus not struck so quickly but there is hope for the near-term market once the worst effects are behind us, which will hopefully be sooner rather than later,’ he added. 

Quicker to sell: The time to sell a home has dropped to just over two months

Rightmove said properties were changing hands at a quicker pace last month, with the average time to sell a property at just over two months, or 67 days, down from around 71-and-a-half days a year ago. 

London, which has been the worst hit by Brexit concerns, saw the biggest improvement, with homes taking two weeks less to sell than a year ago, or 67 days like the national average. 

Asking prices in the capital also saw the fastest growth of all regions, rising 5.1 per cent. Prices were higher in all regions compared to a year ago, with only Wales and Yorkshire & Humber seeing small monthly falls. 

Nationally, the number of sales agreed is also up by nearly 18 per cent compared to a year ago – which is at the highest level for this time of year since 2016. This strong demand has not been matched by new supply with new seller numbers rising by just 1.2 per cent.     

Shipside said: ‘Many more properties are being bought, and bought more quickly than at this time last year. This is further fuelling the existing shortage of property available for sale, driving up prices to a new record high.’ 

Rightmove added that, looking ahead, potentially lower mortgage rates as a result of the Bank of England’s base rate cut last week could help to support the housing market.

But the spread of coronavirus could temporarily affect the housing market pick-up.  

Colby Short of estate agency comparison website GetAgent.co.uk said: ‘These are great numbers from Rightmove in respect of asking price highs and a significant reduction in the time taken to sell, particularly in the capital. 

‘But hold on, this is data collected only up until 7th March – and to say that a week is a long time in politics is nothing compared to a week where the CoronaVirus news cycle is concerned. 

‘The year has started strongly for property and we all realise that the current crisis of health will be temporary, don’t we? But the question is, how temporary? And will a property market that had sprung from the doldrums of political paralysis weather a viral rival? I think so, but it will be challenging indeed for a while still.’

Asking prices in the capital saw the fastest growth of all regions, rising 5.1 per cent

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