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House prices set to tumble drastically after Christmas in dire expert warning

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Average house prices in England and Wales will hit all-time high of £342,511 in December 2020, according to the expert predictions from reallymoving. As of January 2021 Britons will see the start of the slowdown, with prices in England and Wales set to fall by 1.2 percent.

This means the average home owner will lost over £4,000 off the value of their property.

What is more, this is an annual drop fo 15.4 percent, a drastic fall.

The housing market has been in turmoil, first over Brexit and then due to the deadly coronavirus pandemic.

The virus initially injected some life into the market, as buying and selling took of post lockdown.

It continued through the early autumn, meaning price growth will remain in positive territory through to Christmas based on sales already agreed.

However, the data indicates the market is beginning to run out of steam as the reality the second lockdown and concerns over rising unemployment.

The forecasrs predict price growth will dip into negative territory for the first time in seven months as we head into the New Year.

This reflects the slowdown in buyer demand beginning last month, reflecting cases of coronavirus soaring once more.

Fuelled by the stamp duty holiday, the post-lockdown surge has pushed year on year growth to exceptionally high levels which will become evident in Land Registry data as those deals complete over the next three months.

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According to reallymoving’s data, annual price growth is forecast to reach 14.1 percent in November, 17.5 percent in December and 15.4 percent in January 2021.

Rob Houghton, CEO of reallymoving, comments: “As predicted, the New Year looks set to herald a change in fortunes for the housing market following an exceptional summer and early autumn which has pushed prices to record highs. But it was never sustainable.

“House prices cannot continue to defy macroeconomic influences such as rising unemployment, shrinking economic growth and the prospect of a No Deal Brexit at the end of the year.

“While we will continue to see positive growth through to Christmas based on deals already agreed, momentum is now slowing and we expect to see a reversal in the recent spike in house price growth over the first quarter of 2021.

“One of the biggest challenges facing buyers going forward will be securing mortgages, particularly for first time buyers with small deposits, the self-employed and those on furlough which has now been extended to the end of March.

“Government intervention to support First Time Buyers may be necessary next spring to prevent the market from stalling.”

Sellers have been dropping asking prices to beat the stamp duty deadline. 

There are widespread concerns that buyers who agree a purchase now may not be able to complete their purchase before the end of March and therefore have to pay the full rate of tax on their purchase.

Tim Bannister, Rightmove’s Director of Property Data, explained: “Given the ongoing mini-boom, prices might have been expected to rise again this month, but instead we have a slight dip which could be a result of some new sellers pricing more realistically to have a better chance of agreeing a sale in time to benefit from the stamp duty savings on their onward purchase.

“We know from a recent Rightmove study that sellers are twice as likely to sell if they agree a sale based on the first price at which their property goes on the market, something that’s even more important now as we move towards the end of March and the end of the stamp duty holiday.”

How much stamp duty will you pay after March 31, 2021? 

From April 1, 2021, first time buyers will be eligible for a discount for properties of up to £500,000.

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