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Coronavirus: Weekly house buying interest slumps 40% Coronavirus: People urged not to move house
(about 13 hours later)
UK house buyer interest has slumped as people stay at home to try to limit the spread of the coronavirus, according to property listings websites. The government has urged people not to move house to try to limit the spread of coronavirus across the UK.
Zoopla predicts housing transactions will drop by up to 60% over the next three months. Buyers and renters should delay moving while emergency stay-at-home measures are in place, it said.
Meanwhile, an increasing number of sales that had been agreed before the lockdown are falling through. Its comments come amid reports banks are pressing for a full suspension of the UK housing market.
The government has advised homebuyers and renters to delay moving as much as they can. Lenders are concerned about the effect of the pandemic on valuations, according to the Financial Times.
"Would-be homebuyers paused major decisions and took stock of the unfolding events in the UK and around the world, even before [restrictions] announced by Prime Minister Boris Johnson," Zoopla said. Banks are also worried about granting mortgages during this period of extreme economic uncertainty, the FT said.
Demand in the week to 22 March slumped 40% on a week earlier, its figures suggest. The government said that while there "is no need to pull out of transactions", "we all need to ensure we are following guidance to stay at home and away from others at all times".
The property listings site said the UK housing market had a strong start to the year before the coronavirus outbreak crushed demand. If a property is vacant, people can continue with the transaction, although they must ensure they are following guidelines with regards to home removals.
The pandemic has since led to a "rapidly increasing" proportion of sales falling through, as would-be buyers "reassess whether to make a big financial decision in these shifting times". But if the house is occupied "we encourage all parties to do all they can to amicably agree alternative dates to move".
Sales were still being agreed, it found, but at a 4% slower rate than at the same time a year earlier. Property listings websites say that interest in moving home has slumped amid the coronavirus outbreak.
The Financial Times has reported that bankers have been urging government ministers to suspend the housing market. Zoopla said demand in the week to 22 March fell 40% from the week before and it predicted housing transactions would drop by up to 60% over the next three months.
They are concerned about the impact of the pandemic on valuations but they are also worried about issuing loans due to uncertainty about the effect the virus will have on the economy, the paper reported. Meanwhile, it said a "rapidly increasing" proportion of sales were falling through, as would-be buyers "reassess whether to make a big financial decision in these shifting times".
In response to the crisis, UK Finance, which was formerly known as the British Bankers Association, said lenders would extend mortgage offers for people who were due to move house during the lockdown. Rival website Rightmove also said the slowdown in the UK housing market had been "significant".
"Current social distancing measures mean many house moves will need to be delayed," Stephen Jones, who runs the group, said in a statement.
"Where people have already exchanged contracts for house purchases and set dates for completion this is likely to be particularly stressful," he said.
"To support these customers at this time, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date."
The government has told people "there is no need to pull out of transactions", instead encouraging them to "amicably agree alternative dates to move".
The sentiments identified by Zoopla echo a previous announcement from rival Rightmove, which said the slowdown in the UK housing market had been "significant".
"The number of property transactions failing to complete in recent days and likely changes in tenant behaviour following the announcement of the renters' protections by the government may put further pressure on estate and lettings agents," it said, referring to the recent ban on evictions."The number of property transactions failing to complete in recent days and likely changes in tenant behaviour following the announcement of the renters' protections by the government may put further pressure on estate and lettings agents," it said, referring to the recent ban on evictions.
The government said on Wednesday that home buyers and renters should delay moving if possible while emergency measures are in place to fight coronavirus. Lucian Cook, head of residential research at estate agent Savills UK, told the BBC the practical problems of buying and selling properties at the moment would have "a real impact on transaction levels".
"If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on social distancing to minimise the spread of the virus," a housing ministry spokesperson said. "There are real difficulties around viewings, getting mortgage valuations done, [and] the conveyancing progress."
"Anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice and not move house for the time being." "Whenever we've had a fall in transactions, we've also had a fall in prices - I think 5-10% in a period of low transactional activity.
Meanwhile, there were reports on Thursday that mortgage lenders had started to temporarily restrict some products for certain customers. "We would stand by our five-year forecast of 15% growth over the medium-term. That's because we have low interest rates, low levels of price growth in the run-up to this and a pretty swift response from the government to protect jobs and earnings."
In response to the crisis, UK Finance, which was formerly known as the British Bankers' Association, said lenders would extend mortgage offers for people who were due to move house during the lockdown.
"Current social distancing measures mean many house moves will need to be delayed," said UK Finance chief executive Stephen Jones.
"Where people have already exchanged contracts for house purchases and set dates for completion this is likely to be particularly stressful.
"To support these customers at this time, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date."
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