Although the housing market in the UK has surprisingly reopened, the short-term outlook is bleak.
The announcement by the British Minister of Housing, Robert Jenrick, that the real estate market would restart after the lockdown triggered an immediate surge in activity in the UK real estate market. Around 450,000 buyers and tenants have been stuck in their transactions since March 23. These totaled an estimated £ 80 billion.
Real estate prices have been falling since the beginning of the Corona crisis
Despite the surprising reopening, property prices are likely to continue falling. According to estimates by the real estate agency Knight Frank, “Homes & Property” are available, house and apartment prices in Great Britain will decrease by seven percent compared to the previous year. In April the agency had only expected a decline of three percent.
However, the experts assume that a large part of the fall in prices already took place in the months from March to May. According to Liam Bailey, global research director at Knight Frank, the homes for sale were sold in March for an average of 98 percent of their asking price. Sellers have already accepted offers that average 94 percent of the original price. Sales prices have therefore fallen by around four percent since March.
The fall in prices will slow down
Liam Bailey even assumes that real estate prices have fallen by around five percent since the beginning of the Corona crisis, when taking offer and selling prices into account. However, he does not expect prices to continue falling at this rate. “The crucial question is whether providers accept discounts of more than five percent. Some will, but there is growing evidence that the spread between average offers and accepted offers is widening, ”Bailey said.
“If we take into account the fact that in 2020 we will have low new building rates, low inventories and low interest rates, it will be less likely that we will see any further significant declines from here,” Bailey told Homes & Property.
Protective measures must continue to be followed
However, although normality is gradually returning to the UK real estate market, the required safeguards still need to be followed. Viewing appointments and moves may only be carried out under the known distance rules and distance measures.
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In addition, consideration is given to whether interested parties must submit a health declaration before being offered viewing appointments. Real estate agents, on the other hand, always wear a mask and gloves, and the objects are thoroughly disinfected after each inspection.
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