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Industry predicts: “What happens when the housing boom ends?”

Leading housing market commentators tell Reuters and The Negotiator what next year and beyond holds for estate agents.

Nigel Lewis

foxtons

A poll of industry experts by Reuters has predicted that house prices will rise by 2% this year and not fall by 5% as had been widely predicted during the early months of the Covid lockdown.

Buying agent Henry Pryor, Russsel Quirk and Hamptons International’s Aneisha Beveridge are among 22 housing experts polled by the media company in recent weeks.

They told researchers that they expect house prices to hold this year, but that market will ‘stagnate’ next year once the furlough scheme ends and unemployment rises.

pryor“Those who have been hit medically or financially by COVID-19 will have bigger issues to worry about than moving for a bigger garden,” Pryor (left) told Reuters.

“We may well run out of a pool of buyers prepared and able to move for lifestyle reasons as the flood of negative headlines about the true cost of the pandemic to individuals and the nation starts to become clearer.”

Link to Hamptons newsBeveridge (right) says: “Sellers are achieving a record share of their asking price, and while this metric isn’t directly correlated with house price growth, it points towards a strong market where price falls are unlikely.”

The Negotiator contacted other market commentators to find out if they agreed with this ‘feast and famine‘ approach.

Link to Stamp Duty featureAnthony Codling of Twindig (left), says there are already signs that mortgage lenders are building in house price drops next year into their interest rates.

“The post-lockdown demand coupled with a shortage of homes for sale is keeping prices keen in the autumn market,” he said.

“But with the end of the furlough scheme and a second wave without a vaccine we could be heading to a winter of discontent and falling house prices come the Spring.”

leafJeremy Leaf (left), a north London estate agent and a former RICS residential chairman, says: “The report is interesting, not least because of the variation in predictions for house prices in London compared with the rest of the country.

“Predictions for London prices are relatively flat for the rest of this year and picking up a bit next year whereas the prediction is the reverse in terms of the rest of the country.

Of course, prices paid reflect actual transactions and activity, as well as averages, so an increase of 2 per cent may mean some areas will be 4 or 5 per cent higher compared with others maybe 4 or 5 per cent lower.

“What we are finding on the ground is that prices, particularly for smaller three- and four-bedroom houses, are likely to remain fairly robust as demand for working from home and open space, particularly near good schools, continues.

“On the other hand, demand for flats has not been as strong and is unlikely to change anytime soon, especially while the cladding and leasehold issues keep so many properties off the market.”

September 30, 2020

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