Housing Market Reopens, But RICS Warns of Year-Long Recovery

House moves and viewings have resumed in England, but the housing market could take up to a year to recover from the Covid-19 pandemic, the Royal Institute of Chartered Surveyors has warned.

The government eased lockdown restrictions this week, permitting house moves and viewings from Wednesday, providing social distancing measures are maintained.

Tradespeople on self build and renovation sites were also actively encouraged back to work on Wednesday, with the government issuing new workplace safety guidelines for builders to help restrict the spread of Covid-19.

House moves and viewings had been frozen since lockdown was first implemented on 23 March, with buyers and renters urged to delay moving. And the impact of the coronavirus crisis is to be felt for months to come, according to the Royal Institute of Chartered Surveyors (RICS), which anticipates house prices to be lower as the market begins to reopen. 

The latest RICS UK Residential Market Survey, which highlights the impact of lockdown on house sales, revealed that in April 80% of respondents saw people pull out of transactions.

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

“Moreover, whether this can be realised will largely depend on how the pandemic pans out and what this means for the macroeconomic environment.”

(MORE: £82bn Worth of House Sales Suspended Due to Lockdown, Zoopla Reports)

House Prices To Fall

House prices soared at the start of the year in the wake of Britain exiting the EU, but the Covid-19 pandemic could lead to a decline in house prices by the end of 2020, although experts disagree on by how much. 

The RICS says the feedback from its market survey suggests that house prices could take between nine and eleven months to recover to previous levels.

One potential measure to speed up the housing market’s recovery is a stamp duty holiday. Around 62% of RICS respondents believe a stamp duty holiday would help sales recover following the pandemic, lifting sales and leaving prices relatively unchanged. 

Hew Edgar, head of UK Government Relations, said “RICS last month called on the UK government to explore confidence-boosting measures for the residential market as it reopens, and the data suggests that a proposal for a stamp duty holiday would be a successful change that would boost transactional activity, helping people move home. 

“There are, of course, other options available to the government as they reopen the market, notwithstanding stamp duty options such as reducing or removing stamp duty for downsizers that would kickstart market fluidity.”

(MORE: Rightmove Cancels Monthly Report on Asking Prices Due to Covid-19)

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