UK surveyors expect price falls when housing market reopens

(C) Reuters.

LONDON (Reuters) – British house prices are likely to fall as the market slowly begins to reopen, after a collapse in activity due to COVID-19 restrictions last month, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors welcomed moves by the government this week to try to get the market going again but said, on average, its members expected prices would only recover their pre-lockdown levels in 11 months’ time.

Eighty percent of Britain’s property surveyors said they had seen buyers and sellers pull out of transactions in April as the coronavirus lockdown effectively closed the housing market.

“Not surprisingly, the latest survey shows that housing activity indicators collapsed in April reflecting the impact of the lockdown,” Simon Rubinsohn, RICS’ chief economist, said.

“Looking further out, there is a little more optimism but the numbers still suggest that it will be a struggle to get confidence back to where it was as recently as February.”

RICS’ headline house price balance plunged in April to -21 from +9 in March. Three quarters of surveyors expected prices to fall when the market reopened, with 40% predicting a drop of more than 4%.

New instructions to sell a property in April slumped by the most since the survey began in 1999.

Buyers and renters in England were given the go-ahead to move house again by the government on Wednesday when estate agents’ offices reopened and buyers and renters were allowed to able to view properties in person among other changes.

Nearly two-thirds of the surveyors polled by RICS said a temporary suspension of Britain’s stamp duty tax on property purchases would help the market recover after the lockdown.