The latest Cebr Housing Market Update forecasts that UK house prices will fall by 5.0% in 2020 and by a further 10.6% in 2021, with the largest quarterly falls set to take place at the end of this year.
The stamp duty holiday will reduce the average property transaction by £4,400, which Cebr says will trigger a 6.0% rise in transactions corresponding to 41,000 additional property sales between now and 31st March 2021, plus up to 60,000 transaction brought forward from later in the year.
However, a V-shaped recovery in the housing market is not expected, with average house prices forecast to remain below their pre-coronavirus level until at least 2023. The extensive steps introduced by the government to support the economy during the height of the lockdown – including the furlough scheme and mortgage payment holidays – have provided a buffer so far between individuals and the economic downturn currently taking place.
With mortgage payment holidays set to end in September and the Coronavirus Job Retention Scheme scheduled to finish in October, the full force of the downturn will – for many households – be felt towards the end of the year, according to the report.