This month the focus of the market overview is on the impact of the economic recession on house prices and rents.
Forecasts of future house prices vary considerably. The Guardian recently reported an “end of lockdown“ bounce in house prices, but the same article reported that according to estate agents and surveyors this could quickly run out of steam.
The Royal Institution of Chartered Surveyors (RICS) reported that for the third month in a row house prices are falling. RICS anticipate a flat to marginally negative trend in house prices over the next 12 months.
The Centre for Economic and Business Research (CEBR) revised its previous house price forecast of a fall of 13% this year to 8.7%. Savills is sticking with their existing five year forecast of average house prices increasing by 15.3% by the end of 2024.
Turning to rents latest Quarterly Rental Index published by Zoopla, in association with property analyst company Hometrack, reported the following findings:
- The impact of Covid – 19 caused a 57% fall in demand for rented property in the two weeks to 30th March with a partial recovery in April.
- Rental supply increased ahead of the lockdown, as landlords switched from the short term market to conventional longer term tenancies.
- Lettings in 2020 will be 25% down compared with 2019.
- The annual average rental growth is 2.4% compared with 1.5% last year. Rental growth for the rest of the year is expected to be moderate but remain in positive territory.
- There are wide regional variations in the annual growth in rents. The highest annual growth in rents were in Nottingham, Bristol and Leeds at 4 – 5%
The report concludes that “the impact of Covid -19 has been less pronounced in the lettings market than the sales market. Increased uncertainty means that many people looking for a home will turn to the rental market.”
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK in the light of Covid-19 at our next PIM.
We’ll be arranging this when safe and practical to do so.
Meanwhile, stay safe.