Fall in house prices expected in new year

December 24, 2020 by Brendan O'Neill

House Prices

The newest house price forecast from the reallymoving price comparison site predicts a drop in the average price of a UK home at the start of next year, following several months of rising prices in 2020.

The website is forecasting a 1.2% drop in price during January, which it predicts will be followed by a further 2.5% fall in prices for February. To make its predictions for the UK housing market next year, reallymoving analysed buying price figures secured via 30,000 quotes for conveyancing.

Based on this data, it expects the average house price for Wales and England to hit a peak of £352,239 this month, which will be followed by a significant drop in the first two months of next year, leaving it at £343,312 for February.

Its analysis also reveals that – although the market has appeared buoyant since the first lockdown ended – first-time buyer numbers dropped by 12% from July to December, in comparison with the same six months in 2019.

Rob Houghton, the reallymoving Chief Executive, told Mortgage Introducer that new figures showing a definite decline in house price growth made it more confident that its analysis was correct, adding:

“Despite positive vaccine news, which will certainly boost confidence that the end of the pandemic is now in sight, there are significant challenges for the housing market to overcome in the short term.”

Although not great news for sellers, a drop in prices could bring more buyers into the market, which will mean more work for advisors with CeMAP training.