Housing market set for year-long freeze

The coronavirus crisis has had a profound impact on the property market and worse is yet to come, warn Adam Williams and Melissa Lawford

Homeowners trying to sell their properties face a year of misery as the number of buyers dwindles, estate agents close their doors, banks withdraw deals and house prices fall.

There is growing concern among banks about whether property sales should be allowed to continue. Virgin Money and Skipton Building Society have suspended all new house purchase mortgage applications. It is understood other lenders are pushing for transactions to be suspended by the Government. All current mortgage offers for home movers have been extended by three months.

With valuers unable to visit homes to carry out crucial inspections, transaction numbers are expected to crash. The virus outbreak will cause sales in the spring months to plunge by as much as 80pc compared with last year, according to Zoopla, the property website.

In the past two weeks, banks have withdrawn hundreds of mortgage deals, meaning those who have chosen to soldier on face higher interest rates.

Neal Hudson of Resi Analysts, a property research firm, said the situation could worsen. “I wouldn’t be surprised if we saw short-term numbers like China,” he warned. There, agreed sales in 30 major cities plummeted by 90pc during the first three weeks of lockdown, according to Capital Economics, a consultancy.

Sellers in Britain are already counting the cost. Joanna Murphy, 67, sold her home earlier this month and has been staying with her sister while she waits to complete the purchase of a property in Ireland. She exchanged contracts and has transferred €350,000 (£320,000) to her solicitor.

But in the process she has already lost about £25,000 as the value of the pound has fallen. A bigger problem is that the seller is Swiss and