The housing market in England and Wales remains on course to record strong growth this spring, according to reallymoving.com.
Its House Price Forecast for March shows expected average price growth of 5.9% over the next three months.
It says this will occur as the increased sales activity recorded in the new year – referred to as the ‘Boris bounce’ – will start converting into agreed deals.
However, the home moving website says that the impact of the spread of coronavirus could see ‘nervous’ buyers withdrawing from deals, which could lead to a collapse in sales over the next few months.
Last month, the average agreed price in England and Wales dropped by 1.1%, while annual growth was steady at 4%.
The price forecast suggests that prices will dip by 0.7% this month to an average of £289,137, with annual growth sitting at 3.4%.
In April, reallymoving predicts monthly growth to bounce back to 4.3%, with annual growth of 6%. It estimates the average agreed price to reach £301,524 next month.
Meanwhile, the forecast for May suggests further growth, with the typical agreed price across England and Wales estimated to rise to £308,396 – equivalent to monthly growth of 2.3% and an annual rise of 9.9%.
It says the impact of coronavirus and its effect on jobs, pensions and investments won’t show in data until June.
“Buyers returned to the market in their droves in the New Year and this activity has clearly translated through to higher house prices across the country between March and May, but now we are facing another potentially prolonged period of uncertainty due to the deepening coronavirus crisis,” explains Rob Houghton, CEO of reallymoving.
“The current situation is unprecedented but we know from past events such as the global financial crisis in 2008 that when people were worried about their jobs and their pensions, they tend to withdraw from making big financial decisions and avoid taking on new debt.”
He says the Bank of England’s decision to cut the base interest rate to 0.25% earlier this month will help to mitigate the impact of Covid-19.
“Consumer confidence is fragile, and I expect we will see a proportion of deals collapsing and a short-term drop in prices by late spring or early summer,” he adds.
