Will the property market bounce back?

Over the coming months retailers and wholesalers that supply kitchens, carpets and light fittings will join the army of previously furloughed estate agents in getting a boost. Howard Archer, chief economic adviser to forecasting group the EY Item Club, describes the move as “relief for the housing market” that “should allow activity to progressively pick up” over the coming months. The anxiety surrounding the path of the coronavirus pandemic, and the prospect of thousands of businesses going bust and millions of people becoming unemployed, will keep a lid on the recovery. The best images from around the world this week (Photos) People arrive at the Montparnasse Station to resume work in the city after gradual easing of coronavirus lockdown, on May 10. The Mariachi Duo Villa Maria, Sergio Carpio (L) and Melissa Villar, accompanied by their dog G├╝iro, perform via the internet for a client on Mother's Day, from their apartment on May 10. Consumer confidence is currently at or near record low levels on many measures, and many people are likely toremain cautious for some time to come with regards to making major spending decisions such as buying or moving house.” Archer is one of the more optimistic analysts of the property market, expecting a fall in prices of just 5% over the next few months and a flattening-out by the end of the year. The Centre for Economics and Business Research predicts that prices in 2020 will be down 13% “as a lack of transactions, high uncertainty and falling incomes take their toll”. If commercial properties become less attractive to employers following a shift to home working, a trend to convert empty offices into apartments could pick up pace. A drift to the city could come to an abrupt end as the prospect of rejoining the morning commuter crush loses its appeal. And the hollowing-out of town centre high streets could be turned around if the prospect of queuing at an out-of-town supermarket is tarnished and buying from local shops is seen as safer. The promise of historically low interest rates for the next two years – and most likely a decade or more – could underpin this transition, but the route back to a more normal level of transactions will be slow. Even so, we expect house price gains to be no more than 2-3% in 2021.” Rubinsohn argues that the government will need to consider tax breaks or subsidies to kickstart the market before housebuilders consider limiting the supply of new homes further. The couple, who live near Hebden Bridge in West Yorkshire, had an offer accepted on a new home nearby during lockdown, based on a virtual viewing, and were keen to get their place on the market. If there’s a massive crash and we end up having exchanged on it and can’t find a buyer for this one, that will be a problem.” The seller Tess Butler, 46, started to try to sell her home in Warminster, Wiltshire, in July last year. Butler works in the tech industry and was keen to offer virtual tours, but her estate agent put staff on furlough and is still closed. She is ready to do viewings, but says agents everywhere will have to manage expectations, given the domestic challenges posed by lockdown: “Like other people we have been properly living in the house for the past couple of months.” And prices area concern. “I’m selling in an area where prices may go down, and moving somewhere where I don’t think they will.” The estate agent Tom Floyd, 33, is sales manager at the Kennington branch of Winkworth in south London.