New sales agreed have already plummeted by 15 per cent and over the next three months there’s going to be a 60 per cent drop in transactions.
The gloomy forecast comes from Zoopla’s research department which says low transaction volumes are already expected to continue into the third quarter.
Some individual spring months may see newly agreed sales down by up to 80 per cent on the same month last year.
In its latest market snapshot concentrating on 20 major cities, the portal says Coronavirus’ impact on the UK property market is unprecedented, effectively killing off viewings and valuations because of the need for social distancing.
Buyer demand over the seven days to 22 March was down 40 per cent on the level recorded one week prior, the portal says, as would-be home buyers paused.
Purchases already agreed and moving towards exchange of contract are continuing, but Zoopla says a rapidly growing proportion of sales are already starting to fall-through.
Fall throughs last week were 60 per cent higher than the previous week. Stock is continuing to be listed, although at a slowing rate.
Interest from new buyers has fallen dramatically, but the market has not ground to a complete standstill. Sales continue to be agreed, albeit at a slower rate, down 15 per cent on last week and four per cent below levels recorded a year ago.
A fall in demand is expected to culminate in a reduction in sales agreed towards the end of the quarter and into the summer months, given the time lag between marketing a home to agreeing a sale and completing a transaction - a process that can take four to six months end to end.
However, the scale of the downturn in transactions is dependent on the effectiveness of Government action to support jobs and the wider economy, and whether this curtails an increase in unemployment.
Richard Donnell, director of research and insight at the portal company, says: “We do not expect any immediate impact on prices. Beyond this, the outlook for house prices largely depends upon how the government’s major package of support for business and households reduces the scale of the economic impact. Low mortgage rates mean forbearance will remain the preferred choice for lenders, but further Government support in these unique times cannot be ruled out.
“The timing of any rebound in housing market activity depends upon when new restrictions are lifted, and the extent to which households and businesses are able to return to a normal way of life. Browsing for homes online is set to continue and, while demand for property may rebound quickly, it will take several months for agents to rebuild new business pipelines.”