House prices set to fall 6.2% in first quarter after peak in December

“Given the broader economic backdrop of the post-foreclosure housing market boom, it was never a question of whether this would end, but when.”

Average prices in England and Wales will fall by 1.2% in January, 2.5% in February and a further 2.6% in March – for a total of 6.2% in the first three months of the year, according to research by Reallymoving.

Reallymoving claims that the housing market boom in summer and early fall is “unsustainable and is now entering a period of readjustment”.

Reallymoving captures the purchase price that buyers have agreed to pay when they search for assignment quotes on the comparison site, typically 12 weeks before their completion, allowing it to provide a real estate price forecast on three months.

The company says the price cuts are likely to attract more first-time buyers to the market later in the spring, who may have resisted the price hike in recent months, especially if lenders continue. turn to higher LTV loans and ease restrictions on the gifted. deposits.

In addition, once the stamp duty holiday ends, he expects the pressure on carriers, surveyors and moving companies to ease, “easing system congestion and bringing more reliability to the system. moving process “.

Rob Houghton, CEO of Reallymoving, commented: “Given the broader economic backdrop of the post-lockdown housing market boom, it was never a question of whether it would end, but when. In the second half of 2020, buyers faced stiff competition for homes, forcing them to pay more and in many cases canceling out the stamp duty savings, but already this year we are seeing demand plummeting to more normal levels and prices come down. The extent of the decline depends on the length of the current lockdown and the Chancellor’s generosity in mitigating its impact, the speed of vaccine deployment and the ensuing economic recovery. The market has yet to be truly tested by the end of the leave and mortgage payment holiday scheme, which currently masks job losses and sales of distressed properties.

“As we head towards the end of the stamp duty holiday on March 31, sellers should prepare for an increase in gazundering, where buyers reduce their bid just before the exchange. A large number of deals will depend on a supposed saving in stamp duties, and if they are not concluded on time, buyers will suddenly have to find a significant amount of money – or renegotiate the price.

“It’s not all bad news though, with a Brexit deal finally reached that ends four years of uncertainty, and affirmative action by lenders to reintroduce high loans to assess mortgages and overturn bans on loans. deposits offered. Combined with lower prices and the end of the stamp duty holiday, we could see favorable conditions for first-time buyers to make a comeback later this year. “

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Johnnie Hill

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