The latest UK housing market forecasts are predicting a 3% drop in average house prices over the course of 2020, due to the ongoing effects of the coronavirus pandemic.
Should the lockdown imposed by the government continue until the close of May, the Knight Frank real estate firm is anticipating a 38% drop in the number of house sales this year. Meanwhile, the average price of a home in the UK will fall by 3%, although the prices of homes in sought-after locations such as the centre of London will not be impacted by the crisis.
Although this is alarming news for many, reports are forecasting that the housing market will not remain in this slump for a long period, with a big recovery in prices being predicted for next year. Indeed, the price of homes in central London alone is expected to rise by 8% during 2021.
The drop in prices and sales comes in the wake of a start to 2020 that saw the housing market experience a real lift, with March having brought a price rise of 3%, before the virus crisis took hold. Speaking to City AM, Liam Bailey from Knight Frank said:
“While we expect a revival in activity to continue, with volumes next year expected to be 18% above the level seen in 2019, this expansion in sales in 2021 will not fully offset the losses seen this year.”
The temporarily lower house prices may enable an experienced CeMAP mortgage advisor to get better deals for homebuyers.