A “SURPRISE” housing market rebound of up to 3 per cent will mean property prices don’t start to fall until later this year, Zoopla has predicted.
The online property portal says it expects to see house prices bounce upwards over the coming months as pent-up buyer demand, which has grown during lockdown, is released into the market.
Read our coronavirus live blog for the latest news & updatesZoopla expects property price to surge by up to 3 per cent before falling later this year[/caption]
It reckons UK prices are set to increase by between 2 per cent and 3 per cent between July and September.
But Zoopla adds that it expects price falls to follow towards the end of 2020 into early 2021 as economic conditions bite.
Richard Donnell, Zoopla’s director of research and insight, said: “The rebound in housing market activity has taken many in the industry by surprise.
Will a payment holiday affect your chances of getting a new mortgage?
IT'S up to individual lenders to decide whether or not they take into account a coronavirus payment holiday when considering a mortgage application.
Although they can’t see a payment break on your credit score, they may use other methods such as Open Banking where it will show up.
Here’s what the banks have said they will do, according to MoneySavingExpert:
Barclays has said that it won’t necessarily use information of a payment holiday due to the pandemic when assessing a new mortgage application.
For example, a payment holiday with another lender won’t have an impact on your mortgage application.
- Bank of Scotland, Halifax and Lloyds
All three banks are owned by Lloyds Banking Group. They’ve said that it will take payment breaks into consideration when deciding whether to lend to you, even if you took it out due to the coronavirus crisis.
- NatWest and RBS
Both are part of the same banking group, Royal Bank of Scotland. The policy here is that a coronavirus payment break would be considered but having one itself wouldn’t prevent someone from being approved a new mortgage.
“It is welcome news given the projections for falling economic growth and rising unemployment.
“Estate agents and developers are responding and using the upsurge in demand to rebuild their sales pipelines and open up their developments.”
Zoopla adds that in England, where the housing market reopened in May, the sales rebound has been strongest in the North, led by Leeds, Sheffield and Manchester, where sales are up to around 20 per cent higher than in February.
While buyer demand is elevated, Zoopla says the choice of properties available per estate agency branch is down by 15 per cent compared with a year ago, which is also contributing towards pushing up prices.
Mr Donnell continued: “We see returning pent-up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown.
“House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.”
In 2019, a fifth of all home-buyers purchased a property with a deposit of 10 per cent or less and there are fears first-time buyers could be frozen out of the market.
more on house prices
But a lack of first-time buyers would be felt by the rest of the market, says Zoopla, as it would prevent other buyers higher up the housing chain from moving.
Commenting on Zoopla’s report, Nick Leeming, chairman of estate agent Jackson-Stops, said: “Those looking to sell their homes this year will benefit from listing their homes on the market sooner rather than later to capture the pent-up demand from when the market was closed.
“These sellers are not only more likely to achieve higher offers but should also secure a quicker sale by listing their homes in the coming months.”