While the housing market got off to a strong start to the year with renewed confidence from buyers on the back of the convincing general election outcome, coupled with some positive movement on getting Brexit done, the wheels came off as Covid-19 took hold. With lockdown meaning viewings and valuations were no longer possible from the beginning of April, the housing market pretty much ground to a halt.
It’s therefore not surprising that recent house-price indices are shocking as there is so little data to measure. Nationwide recorded the largest monthly fall in prices in May for 11 years, taking us back to the dark days of the financial crash. Halifax was slightly less severe, noting that house prices fell for the third consecutive month in May with a 0.2 per cent month-on-month decline in average prices. This fall was more modest than April’s drop of 0.6 per cent.
However, it is not all bad news. If you are in the market for a new property and are moving up the ladder to a larger family home, any hit you take on the sale price of your existing home will be more than clawed back in the saving you make on what you pay for your next property. There is certainly plenty of pent-up demand and people interested in making a move with Rightmove reporting its busiest day on record on 27 May, as more than six million visited the property portal.
First-time buyers, including young professionals, who were renting pre-Covid and have moved back in with their parents for lockdown, are also finding that they have been able to save money by not going out, having to pay for travel to work and generally spending less. Many are taking the opportunity to clear debt that has been hard to shift while they’ve had the expense of living and working in a big city and started putting money aside for a deposit at long last. This may make that dream of buying their own home a reality sooner rather than later, particularly if prices have fallen away a little.