Property prices set to fall after market reopens

House prices are likely to be around four per cent lower when the housing market finally opens up after the coronavirus outbreak, surveyors have claimed.

Property prices could drop by 4 per cent once the market reopens after the crisis, RICS said.
Property prices could drop by 4 per cent once the market reopens after the crisis, RICS said.

Industry body RICS has called on Scottish Government to provide clarity that the house buying and selling process, including inspections and valuations within clear parameters of public health, can restart.

However, it said that prices were likely to be down on pre-crisis levels and could take eleven months to recover and called on the Scottish Government to scrap the land and Buildings Transaction tax (LBTT) for downsizers in a bid to stimulate the market.

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Hew Edgar, head of UK Government relations at RICS, said: “RICS last month called on the UK Government to explore confidence-boosting measures for the residential market when it is safe to resume, and given that 62 per cent of UK members believed that a stamp duty holiday would boost sales and keep prices unchanged, we urge the Scottish Government to make the same assessment of the LBTT regime.

“The Scottish Government now has the opportunity to pave the way for a resilient post Covid recovery, and should look at other palatable options that would kickstart market fluidity, such as reducing or removing LBTT for downsizers, or support the scaling up retrofitting of existing homes as both an economic stimulus and a spur to a healthier and greener housing stock for Scotland.

He added: “That said, what the housing market needs first and foremost is clarity, and an unambiguous signal from the Scottish Government of when the house buying and selling process, including inspections and valuations within clear parameters of public health, can restart.”

RICS said that a recent survey of its members highlighted that with the market effectively closed for business, 80 per cent of contributors in the UK have seen both buyers and sellers pulling out of transactions.