Housing market activity collapses to record lows in April

Eight out of 10 estate agents saw buyers pull out of house purchase deals in April, with surveyors almost unanimously reporting falling sales in the month.

The latest monthly housing market survey from the RICS said that a record balance of 92% of surveyors saw sales dropping in April, with a balance of -96% reporting falling new instructions.

Both figures are the worst ever scores recorded in the 20-year life of the survey, significantly exceeding lows experienced in the depths of the global financial crisis, meaning the drop off in sales is far more widespread than ever previously experienced.

The figures show the extent to which the government’s coronavirus guidance effectively preventing all but “critical” home moves effectively put the market on hold during the month.

The body also found that 80% of surveyors had seen either buyers or sellers pulling out of transactions during the month.

However, the RICS said that estate agents were more evenly balanced in their view on the impact of the crisis over the longer term, with a balance of just 6% thinking prices will have reduced from their current level in a year’s time.

The survey comes in the wake of the government’s decision this week to effectively restart the housing market in England, with fresh guidance allowing most home moves to go ahead for the first time since the lockdown was brought in in March.

The figures come alongside guidance from the RICS for surveyors, developers and contractors on how to manage the home moving process in a way that abides by social distancing principles.

Data from residential property website Zoopla suggests that around 373,000 house moves with a combined value of £82bn have been held up by the lockdown process. Surveyors interviewed by the RICS said they expected the market to bounce back quickly with the lifting of lockdown restrictions, but that the uncertain economic environment meant it was not clear whether high levels of activity will be sustained.

Alex McNeil, of estate agent Bramleys in Huddersfield, said: “Beware that activity may be like a coiled spring and momentum will quickly fall away unless there is a stimulus.”

Simon Rubinsohn, RICS’ chief economist, said it was not surprisingly that housing market activity indicators collapsed in April, reflecting the impact of the lockdown, adding that “it will be a struggle to get confidence back to where it was as recently as February.”

He said the ability to recover will largely depend on the wider economic impact of the pandemic, and called on the government to introduce “further specific interventions” to support developers, such as a stamp duty holiday to kickstart housing market activity.