Brace yourselves for yet another forecast of a sharp house price fall in the New Year. Yes, house prices are rising, with seemingly nothing to stop them, but, according to the lates Reallymoving house price forecast it's all downhill from January onwards, which will see a 1.2 per cent house prices decline in England and Wales, followed by a sharper, 2.5 per cent fall in February.
The Reallymoving data set is a little different from other house price forecasts in that they collect their figures by obtaining conveyancing quotes – so, prices agreed before house sales complete. So, to an extent, they do have foresight into the housing market landscape several months from now – give or take three, according to their website. Rob Houghton, CEO of Reallymoving, comments:
'Our prediction of a New Year change in fortunes for the housing market has been further strengthened by the latest data which clearly shows price growth entering a downward trend in January and accelerating in February.
'The mask is beginning to slip on the two-tier housing market of recent months, which has seen activity from equity-rich homeowners who are less affected by the pandemic, concealing problems at the lower end of the market where First Time Buyers have benefited little from the stamp duty holiday and faced considerable challenges securing higher loan to value mortgages.
'The kind of growth we’ve seen over the last few months was never sustainable. Despite positive vaccine news, which will certainly boost confidence that the end of the pandemic is now in sight, there are significant challenges for the housing market to overcome in the short term, including the end of both the stamp duty holiday and the furlough scheme on 31st March, which is likely to result in further downward movement in prices over the first half of next year'
Is this prognosis an unequivocally bad thing? It depends on where in the housing hierarchy you're located, and what your hopes and expectations around property have been since the pandemic. Sellers who were hoping to sell at a good price should be comforted by interpreting the research as pointing towards a house price correction rather than a crash; house prices across the UK will have increased by an astonishing 18.4 per cent by January 2021 in comparison with 2020; a 2.5 per cent decline hardly constitutes a crash in that context.
Prospective buyers should be relieved by the forecast, because it takes much of the pressure of meeting the stamp duty holiday deadline off; anyone who doesn't find a home and complete a house sale in time for the stamp duty holiday deadline will not necessarily miss out on a discount – it will come naturally with the tempering of the housing market.