The coronavirus lockdown has affected the housing market because viewings stopped and sales that were in progress were delayed. Many people are worried about the economy dipping and causing a fall in house prices. If you plan on selling in the coming months, then there might be cause for concern.
There were 373,000 property transactions delayed according to UK Cities House Price Index from Zoopla, and the estimated value was 82 billion. There was a 70% decline in demand for homes, and this was even seen in the reduced levels of browsing property online. If you’re considering floor plan services, then check out Fourlabs.
Many potential buyers are still interested in going on with their plan, which is good news. 60% of potential home buyers said they were still interested in purchasing a property, with the rest were still giving it time to see how things turn out. With the lifting of restrictions, there has been an increase in market activity, but the market is still subdued.
COVID-19 and Property Prices
With the property market starting to open back up, prospective buyers and homeowners are wondering what the property prices are going to be in the coming months. It is impossible to say with certainty what is going to happen even though there are forecasts and predictions out there.
One thing we know is that the lockdown has affected the economy and also consumer confidence. Maybe there could be a decrease in demand in the short term because buyers are taking the “wait and see” approach before making the decision. The house prices might fall if a recession is coming, which is something forecasts have suggested.
There was a 1.7% drop in house prices in May compared to April, according to Nationwide. This became the largest monthly fall in 11 years, which puts the last at the financial crisis period.
The country has experienced an economic contraction because of the measures that have been adopted to deal with the virus.
There have also been measures implemented that seek to support businesses and individuals who need help to create a rebound. This is going to minimize the impact of the pandemic on the housing market.
What does it mean when the prices fall?
If you plan on staying in your home
Everyone hates it when they see the value of the asset fall. For most people, the home is their biggest investment. They get worried every time the price of the property falls. You should look at things in the long term, just like when investing.
If you don’t plan on selling the house, then the value is just paper loss. You have not lost anything until you decide to sell it at a lower price. There has been a price increase in recent years, and this made up more than the fall suffered during the financial crisis. Most property prices have recovered in the long term after facing short-term dips. If you have owned your home for some time, then there is a good chance its current value is higher than what you bought it for even if you account for the recent drop.
You don’t have to worry about the property prices if you don’t plan to sell the home soon.
If you hope to sell
If you plan to sell your home in the coming months, then the fall is going to be frustrating. While there are some predicting a fall in prices, there are those who think that there will be strong demand from those who put their plans on hold.