Are house prices set to crash in Norfolk?
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Find out why reports of a housing price crash are unfounded in Norfolk, according to one of the area’s leading estate agents.
With recent lockdown measures put in place in response to Covid-19, concerns about the stability of housing prices across the UK were expected, as more than 450,000 buyers were forced to put their plans on hold.
It was only last month, on May 13, that buyers and sellers were officially told that they could progress, that estate agents could once again open, and that moving house could take place – as long as social distancing measures were adhered to.
As a result of this, property sales throughout March and April were, understandably, down – there was, in fact, a 90pc fall in sales.
This is certainly an alarming statistic, but Jan Hÿtch, partner at Arnolds Keys and chairperson of the Norwich & District Association of Estate Agents, says it’s important to understand that a single statistic does not mean a lack of demand.
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“To suggest that this statistic implies a crash in the housing market, a lack of demand, or a drop in house prices is, quite frankly, irresponsible and untrue,” she says.
“It’s a bit like saying that over the same period, the sale of draught beer has dropped by 90pc, which means Britain has decided it doesn’t like drinking draught beer anymore! The lack of access to a product or service, especially when enforced by law, does not equal a lack of demand.
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“During March and April, all estate agency offices were closed. Most staff were furloughed, as were property solicitors and conveyancers. People were forbidden to transact where the transaction involved anyone leaving their house – basically anyone who had to physically move. So the majority of the property market was in atrophy.”
A number of factors contribute to house price growth, says Jan. These include demand, ability, affordability and transaction volume – all of which were artificially stopped during lockdown.
“Without a sensible contextualising narrative, the resulting statistics are going to be misleading,” she says.
“Since lockdown was released for the property sector in the middle of May, the volume of activity in viewings, offers and people wanting to come on to the market has been three or four times what we would normally expect.
“People are glad to be getting on with their lives, generally transacting at sensible prices, and would get short shrift anyway if they were running around putting in offers at 15-20pc below asking prices.”
But Jan also says that, despite the increased activity, the property sector is not claiming a house price boom.
“Although June is traditionally one of the busiest months for buyers and sellers, we can see that clearly much of the activity is the pent up demand from people who have had to sit at home for two months and wait until now to be able to get on with their lives.
“Even the Office for National Statistics has commented that it’s not really possible to accurately measure house prices at the moment, because there is not enough data to make an informed view, until we have been back up and running for a while longer, and there are more transactions to analyse.”
As a result, Jan urges buyers – and sellers – to be “calm and sensible” about the property market, pointing out that summer is always a favourable time to market your home.
“The unique added factors this year are the surge in demand we are now seeing and the expressed desire from a number of buyers that, if the relaxation of this lockdown leads to a further spike in infections, and we see a second lockdown, they want to get moved before that happens. Especially those who have realised more than ever how much they need a garden and some outside space to be able to socially distance from their own family members.”