House prices data is meaningless says Rightmove as the number of homes put up for sale collapses in lockdown - and leading agent calls for a stamp duty cut
04-20-2020
- Pre-lockdown sales agreed in the year to 23 March were up 11%
- That was the best start to a year since 2016, Rightmove said
- But now data are meaningless because most activity has stopped
- Rigthmove saw 40% decline in site visits as UK went into lockdown
By CAMILLA CANOCCHI FOR THISISMONEY.CO.UK
The property market has seen an 'abrupt turnaround' from its best start to a year since 2016, with homes put up for sale collapsing since the UK went into lockdown.
Property website Rightmove said the average house price 'of the daily dwindling number of properties coming to market' rose 2.1 per cent to £311,950 in the month between 8 March and 11 April compared to a year ago.
However, it admitted the data meaningless because most activity has stopped since the UK went into lockdown on 23 March.
Its report came as leading estate agent Knight Frank called for a stamp duty cut and other support measures to help avert a property market collapse when lockdown ends.
+3House prices: Statistics are no longer meaningful given the lockdown, Rightmove said
'Given the lockdown and pausing of key activities in the housing market, statistics on the number of properties coming to market, new seller asking prices, and new sales agreed are not meaningful,' Rightmove said.
'You do not have a functioning market when buyers can't buy and sellers can't sell, and so the focus needs to be on what is required to help the market recover once the lockdown can safely be eased,' Rightmove said.
SharePre-lockdown sales agreed in the year to 23 March were up 11 per cent, marking the best start to a year since 2016, Rightmove said.
As the lockdown came into force, customer visits to the website, which lists the majority of homes for sale across the country, fell 40 per cent, although it said they started to slowly recover over the past week.
The number of homes for sale is down 'only marginally', by 2.6 per cent, Rightmove said, adding that the number of transactions falling through is similar to what they would have expected to see in a 'normal three week period'.
Rightmove's director, Miles Shipside, said estate agents gents reported 'good co-operation', with both buyers and sellers keen to hold deals together.
'Meaningless': Average asking prices rose 2.1% to £311,950 in the month between 8 March and 11 April
Cut stamp duty cut to revive the property market, says Knight Frank
Urgent stimulus from the Government is needed to ward off a collapse in the UK's housing market, experts have warned.
Lockdown will result in the loss of 526,000 home sales this year if there is no intervention – starving the economy of at least £14.3 billion in DIY and renovation spending, stamp duty and VAT, according to research by the property consultancy Knight Frank.
It wants the Government to implement a stamp duty holiday and expand the Help To Buy scheme.
Without this, it estimates there will be 38 per cent fewer home sales this year than in 2019, even if the lockdown ends in May, while 350,000 fewer mortgages would be approved by banks.
Tom Bill, head of London residential research at Knight Frank, said: 'Moving house has a clear multiplier effect for the economy.
'Different sized businesses in all areas of the economy feel these benefits, which is something the Government will take into account when drawing up its post-lockdown stimulus plan.'
Peter Woodthorpe, director of estate agents Readings in Leicester, said: 'At worst people are holding off to see what happens by the end of the lockdown, but not withdrawing from the transaction.'
Ben Hudson, managing director of Hudson Moody in York, said they were doing 'virtual viewings' of properties for potential buyers and tenants.
'The vast majority of ongoing sales want to proceed as soon as possible after the lockdown and many potential purchasers want to book appointments as soon as we are once again able to do viewings,' he said.
The number of homes for sale is down 'only marginally', by 2.6 per cent, Rightmove said
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It comes as the Royal Institution of Chartered Surveyors warned earlier this month that the property market was coming to a 'near stand still' and it predicted a record drop in sales.
Meanwhile, the Cebr predicted that house prices will fall 13 per cent this year. The crash will be driven by the rental sector, the economic think-thank said, as the amount tenants can afford to pay plummets due to wage cuts and unemployment.
Shipside said it will take 'several months or more' for the market to find its feet, but they did not expect prices to fall significantly once the lockdown ends and the market begins to slowly recover.
He said: 'Once the lockdown ends, agents will have to follow safe viewing precautions to give sellers the confidence to again allow viewers into their own homes, and buyers the confidence that they can safely visit homes that are for sale.'
'During this slow motion period we do not expect significant price falls, as home sellers will not be prepared to cut their prices while it is still not clear how the general public, businesses, financial markets, and the government are going to handle the transition to whatever turns out to be the new normal.