UK house sales likely to plunge by as much as 60% over second quarter as market reacts to pandemic

HOUSE sales are set to plunge by as much as 60% over the next three months, as the market reacts to the impact of Covid-19, a report suggests.

Research modelling by property website Zoopla indicates a fall in transaction volumes of up to 60% over the second quarter of 2020, compared with same period in 2019.

Some individual months this spring may even see newly-agreed sales down by up to 80% on last year, given the shutdown of normal life and knock-on impact for the market, Zoopla suggested.

Low sales volumes are also expected to continue into the third quarter.

Richard Donnell, director of research and insight at Zoopla, said: “Covid-19 presents a major new challenge — not just for the housing market but for the UK and global economies.

“Fifty years of history shows that external shocks have impacted the housing market to differing degrees, largely down to the scale of direct impact on the UK economy.

“The initial impact of external shocks is to reduce consumer confidence and put a brake on housing demand and the number of people moving home, which we can see in our latest figures.”

Before the outbreak, the housing market had got off to its strongest start for four years, according to the UK cities house price index from Zoopla.

But it said the social distancing strategy introduced to limit the spread of the coronavirus had created an immediate impediment to property viewings and valuations, which are integral to buying and selling a home.

The number of previously agreed house sales falling through is also gathering pace, as wider economic uncertainty prompts people to think again.

But the market has not ground to a complete standstill, as sales continue to be agreed, albeit down 15% on last week.