What will property prices look like after lockdown?
Is there a way to predict what will happen to property prices after this pandemic crisis and what should we look out for?
With social distancing measures bringing property viewings to a standstill, anyone who was hoping or just planning on buying or selling a property before the pandemic hit will be wondering how the market is going to look with the new-normal still on the horizon and still an unknown entity.
These questions are also true of us agents who are equally desperate for answers. Our means of forecasting can only be based on past economic downfalls and make comparisons. In there lie the clues, ones Eureka Property believe to be good and speedy signs for recovery.
Will property prices fall after lockdown?
One of the best ways to judge how much a property is worth is to see what is being asked for similar homes, or how much they have sold for recently. Land Registry and Rightmove data sources of monthly property price reports are the best indicators of spikes in sale prices. However, with sales having been at an almost complete standstill for the last quarter it will take months to offer enough accurate data to create a comprehensive analysis.
So, where do we go for comparison?
Given the global effect the pandemic has had on an international economy we should look to the 2008 crash: the nature of the current crisis is different to previous downturns we’ve seen, being caused by global health, rather than economic circumstances. The 2008 credit crunch was mainly caused by limitations placed on borrowing – it was hard and for many impossible to get credit, you a 40-50% deposit to be approved for a mortgage. Along with increased interest rates, there was more negative equity and a greater number of property repossessions. This was the most significant cause of property prices falling.
How is now different? Is there anything to celebrate?
Unlike then, a combination of high demand, which has been building for the almost half a decade since the EU referendum, and freely available low-interest-rate mortgages, furlough schemes and grants that saved jobs in the longterm, as well an even balance between supply and demand will likely see property price grow and potentially settle early, before returning to the gentle increases seen back at the end of 2019, after the Conservative’s general election victory.
The industry has already changed with virtual tours being offered. Advice is given over Zoom meetings. These are all measures we have taken here at Eureka Property.
We are happy to discuss your personal needs and how we can help to get you back in a place you were hoping to have been prior to lockdown. What is evident is that life hasn’t stopped and things are creeping back to normal. So, yes, we believe there are good signs of a speedy and healthy recovery with attractive mortgages and low-interest rates to take advantage of.
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