Property prices were stable in March, but with market activity falling drastically thanks to the coronavirus outbreak, it remains to be seen if they hold up.
February 2020 saw a record high for house prices at an average of £240,461 according to lender Halifax.
Meanwhile, the typical value was £240,384 in March, according to its index – meaning prices were at a standstill last month.
Property values are up 3 per cent when compared to the same time last year, highlighting that the market was continuing to show signs of improvement.
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However, despite the uplift in house prices, it has now become clear that this is unlikely to continue on an upward trajectory, due to the ongoing pandemic.
Russell Galley, managing director of Halifax, warned: ‘With viewings cancelled and movers being encouraged to put transactions on hold, activity will inevitably fall sharply in the coming months.
‘However, it’s still too early to properly assess what potential long-term impacts the current lockdown might have on the UK housing market.
‘While there is very significant uncertainty at the moment, much will depend on the length of time it takes for restrictions to be lifted, the pressure that has been exerted on the economy in the meantime and the effect this has on consumer sentiment.’
Halifax’s report followed Nationwide’s house price index earlier this month which reflected the same sentiments, showing that although property prices were up 3 per cent in March, the market has come to a grinding halt.
This is partly thanks to nearly a third of all mortgage deals now being pulled from the market in response to the coronavirus.
Estate agents have also been forced to close and property viewings and moves are either being cancelled or postponed indefinitely.
Jeremy Leaf, north London estate agent and a former Rics residential chairman, said: ‘These figures look like the calm before the storm.
‘They still show a relatively resilient market, probably reflecting a good start to the month and a weak finish.’
Nearly a third of all mortgage deals have now been pulled from the market due to coronavirus
He adds: ‘But after recording the fastest rise in values in almost a year in February, numbers have returned to more modest levels.
‘Certainly, on the ground, social distancing has wiped out most market activity although encouragingly online viewing and interest in property videos has held up well.
‘Most potential buyers and sellers are putting moves on hold, biding their time and will check on market movements in the hope that they can return in the not-too-distant future.’
Recent reports from property listing firms, Rightmove, Zoopla and OnTheMarket, Rics estate agents and mortgage lenders brokers suggested a pick-up in the property market over recent months.
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The latest Rics survey for February revealed that demand, sales and new instructions all rose for a third successive month.
However, it is now incredibly unlikely that this will continue, given the worldwide spread of coronavirus, with Zoopla reporting that property searches on its site were down 40 per cent in a week.
The homes listing site added that the number of new property sales agreed in the UK has also fallen by 70 per cent since the start of the coronavirus restrictions.
Tomer Aboody, director of property lender MT Finance, said: ‘What a start to the year the housing market had, with positivity so strong that it stood a good chance of lasting the full 12 months.
‘The year-on-year increase in values and transactions indicates that buyers and sellers had got over the Brexit debacle and were getting on with their lives.
‘Of course, coronavirus has now cast a very dark shadow over the property market and wider economy.
‘If the crisis is tackled properly by the government and indeed the country as a whole, then hopefully by the final quarter some of that positivity which we saw earlier in the year will have a chance to return.’
Anna Clare Harper, co-founder of property fund Anglo Residential, added: ‘What is clear to ordinary home owners and investors alike is that residential property has never been more important than when we must all remain inside our own.
‘Suddenly, residential properties are viewed not just as homes, but as places of work, rest, play and shelter.
‘Partly as a result of this, values are not expected to reduce considerably across the type of property most people care about the most: their home.’
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