The agency behind a poll showing one in six buyers putting plans on hold because of Coronavirus is warning that if the trend continues the market could stall once again.
Marc von Grundherr, director of London agency Benham and Reeves, says it’s “good news” that the significant majority of buyers and sellers are carrying on with plans.
But he wants a cut in interest rates “at the very least” to maintain the New Year’s strong start to the market.
Last week his agency released details of a survey of 1,000 buyers and sellers revealing that nine per cent of people stated they were already in the process of buying and selling but have now called it off and decided to wait. Another nine per cent say they were planning to buy or sell at some point this year but have put it on hold. That survey was undertaken before the recent escalation in virus cases in the UK.
“If this hesitation were to spread as rapidly as the cause itself, we could see current growing momentum peter out as market activity stalls once again” he says.
von Grundherr’s comments came after a strong set of figures from the Halifax index for February, which shows house prices up for the fourth month in a row.
House prices were up 2.8 per cent on the year, down from a 4.1 per cent increase in January and below some analysts’ expectations of a 4.0 per cent jump.
In the three months to February, house prices advanced 2.9 per cent; up from the 2.3 per cent hike in the previous quarter.
However, Halifax’s managing director Russell Galley says that while key market indicators remain strong - more buyer and seller activity than in recent years, good employment stats and a competitive mortgage market - the virus threat is now looming.
“There are a number of risks, including the potential impact of Coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year” Galley cautions.
North London estate agent and former RICS residential chairman Jeremy Leaf adds: "These figures show that house price growth is slowing slightly as the previous month's increase has been reined in by concerns about affordability, the wider economic picture and how the Budget is likely to impact on these.
“Of course, it is too early to say if the recent improvement in activity will be compromised by a fall in confidence caused by the virus."
Meanwhile Lucy Pendleton, founder of another London-focussed agency - James Pendleton - says: “Coronavirus impacted our business for the first time on Wednesday, stealing away a sale that was just days from exchanging. The buyer worked in the events industry which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely.”