The Centre for Economic and Business Research (CEBR) said on April 14 that property prices would fall 13% by the end of 2020. On April 20 Rishi Sunak, the chancellor, launched the Coronavirus Job Retention Scheme.
This week the CEBR revised its forecast to a fall of 8.7% this year. Kay Neufeld, head of macroeconomics at the CEBR, says that there will be a gradual decline in house prices this year and that there could be “a bit of a cliff edge” when furloughing comes to an end. “We are still at the start of a major recession and as soon as the job-retention scheme comes to an end we could see a reduction in household incomes and reduced demand for housing,” Neufeld says.
Bill agrees that there is a bumpy road ahead for the housing market. “Over the summer I think we might see some pretty nasty GDP data, which could tip us into recession, and that will negatively impact on sentiment, which will inevitably have a knock-on effect on the housing market. Then the furlough scheme will unwind and we will see how that affects employment,” he says.
What of the thinking that we are in a three-month buying opportunity? Few experts believe that it is that simple; prices are likely to fall farther yet, although how far may not be apparent until the autumn.
Lawrence Bowles, research analyst at Savills, says that he expects to see people sell now and buy later — renting in between, particularly if they want to test out a new location.
Jonathan Mount, managing director of Sterling Private Office, a buying agency, says: “If you find something that might not come back to the market for years don’t delay. If it is going to be your home for a long time, then there is no point waiting. If it is a pure investment play, then hold off and see what happens.”