£82bn of property transactions 'on hold' amid Coronavirus crisis

Some 373,000 property transactions, with a total value of £82bn, are on hold after the Government effectively suspended the housing market as part of its measures to control the coronavirus outbreak, property firm Zoopla has warned.

£82bn of property transactions have been put on hold during the crisis.

The site's latest UK Cities House Price Index warned that completed sales will be 50 per cent lower in 2020 than 2019 – but claimed that lockdown restrictions could fuel a desire for more space and spark a higher demand for moves once the pandemic is over.

North of the border, Zoopla estimated that around 27,000 property transactions have been delayed, although it found that over the two weeks to 19 April, demand for housing in Aberdeen and Glasgow rebounded more strongly than other areas of the UK. It said that housing affordability in the Scottish cities “remains attractive”, and said there could be a faster bounce-back when restrictions lift.

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The report warned that “higher value” cities such as Edinburgh have not yet recorded any material improvement in demand over the last few weeks, with low levels of demand..

Gordon and Camilla Ross and daughter Daisi have been unable to move into their new home in Edinburgh.

Zoopla found that Glasgow is reporting house price growth of two per cent per annum and is the most affordable Scottish city. The current average price for a home in Glasgow stands at £129,000.

New sales agreed are running at a tenth of the levels recorded in early March, with volumes similar to what the market would usually expect to see in late December. The rate of fall-throughs peaked on 23 March, the day of the lockdown, and has fallen back as the volume of new sales being agreed declines.

Scottish Government rules published at the time of the lockdown stated that people are “urged to delay moving to a new home while stay-at-home measures are in place”.

Levels of browsing property online have fallen less and are currently at 35 per cent below levels recorded on 1 March, improving off a low base over the past three weeks. While agents are taking on lower levels of new supply, the number of homes for sale is just four per cent lower than at the start of March, suggesting that sellers are not removing their properties from sale during the lockdown.

“This is critical to ensuring a faster rebound to full market health once coronavirus restrictions are lifted,” the report said.

Richard Donnell, director of research and insight at Zoopla, said: “There is a two speed housing market at present. Parts of the market are at a virtual standstill as a result of the physical restrictions that have stopped new supply coming to the market and the viewing of homes for sale. However, the online browsing of homes for sale and buyers expressing interest in property have been rising off a low base over the last two-three weeks. Demand for housing is still 60 per cent lower than at the start of March, but we expect interest in housing to continue to improve slowly. Northern cities have seen the strongest improvement in underlying demand although levels remain half those at the start of the crisis.

“Sales continue to be agreed in low volumes by purchasers who viewed homes ahead of the lockdown, but there is a large pipeline of agreed sales held up by the temporary suspension of the sales market worth £82bn. These homes represent just under £1bn in estate agency fee income. In addition, these sales will generate associated spend resulting from housing transactions that can stimulate economic activity.”

Mr Donnell said that once the Coronavirus crisis has passed, demand could soar due to a combination of families feeling cooped up in smaller homes during the lockdown – and a post-Brexit “release” which had been expected earlier.

He said: “Without doubt, once the Coronavirus restrictions are relaxed, we should expect the release of demand that has been building since Brexit and political uncertainty destabilised market sentiment. That said, the case for a stamp duty holiday to support a resumption of market activity is clear and a high proportion of savings are likely to be spent, further stimulating economic activity.

“Many households have spent more time at home in the last few weeks and some may feel the urge to move and find more space or consider the potential for remote working. This could boost activity in the second half of 2020, but this all depends upon how much the economy is impacted over the rest of the year and the impact on levels of unemployment. It is too early to register any pricing impact given new sales volumes are 90 per cent down on the start of March. Demand is rising but there is a long way to go until we see a return to typical levels of market activity.”

Locked out under lockdown

Gordon and Camilla Ross and their daughter Daisi, 14, were due to move within Edinburgh at the beginning of April

Now the family is living in Gordon’s parents house in Auchterarder, as they have been unable to return home from Spain.

Gordon, an innovations consultant, said: “We put an offer in for the property in March. At that point, we saw no reason why there would be any problems. It was so straightforward at first. We have lived all over the world and we thought doing this move, in our home country, in our own language, 20 minutes up the road, would be the easiest one we’ve done.

“We had a completion date of 8 April, then our lawyer phoned and told us that wasn’t going to happen. Over the Easter weekend, it looked a bit more hopeful as Registers of Scotland was starting to do things digitally and our lawyer was optimistic, but then we got a call telling us we wouldn’t be able to move. They asked us if we were key workers – which we’re not - as that may have made it possible, although in a chain it still may have not gone ahead.

“We had already given notice on our rental flat so we had to get out. My parents had been unable to return from Spain, so we’ve moved to their house. However, if they do get back, they will need to self-isolate and we can’t be here, so we’ll have to move again.

“The people above us in the chain had already started to move their things out, so they’re sitting there in a half-empty house.

“We now have no idea when it might happen. Our lawyer says perhaps once the lockdown is lifted, we could move within a couple of weeks as we were so far along the process. Our daughter goes to school in Edinburgh, so we just hope that we will be in our new house by the time the schools open again, otherwise we don’t know what we’re going to do.

“Everyone keeps saying this lockdown is such a leveller, but it’s really not. We are lucky because we are privileged and we had somewhere to go, but there are people who would have been left without anywhere.”

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