© 2020 Focal Journal Inc.
Property transactions could collapse by 80 per cent in a month due to coronavirus lockdown

The coronavirus outbreak could cause house sales to plunge by as much as 80 per cent in the individual spring months compared to last year, according to a forecast by Zoopla.

Overall, the property portal predicts an average of up to 60 per cent fall in transactions across the three months to June.

The pandemic has hit the property sector hard. In the seven days to March 22, buyer demand dropped by 40 per cent compared to the previous week, according to Zoopla. However, sales were still agreed, although this was down 15 per cent on last week, and it was 4 per cent lower than the same week last year.

Buyer demand is calculated using a combination of web visits and the number of properties going under offer.

Over the same period, there was a 60 per cent spike in the number of sales falling through. This will only get worse, as it was before the government announced the national lockdown on Sunday evening.

Now, house viewings, legal processes and contract signings have all but ground to a halt, leaving many buyers and sellers in limbo. There is no official guidance from the government, but Michael Gove, the Cabinet Office minister, said: "If it is possible to pause a house move, people should stay in their home."

As a result, there is some confusion over what is possible. Andrew Boast of SAM Conveyancing notes a client, who is a key worker, who has “just been told that they can’t complete on their purchase because the estate agent won’t agree to release the keys due to the virus”.

There is precedent for what happens to a property market in lockdown. “I think the effect on transactions will be massive,” says Neal Hudson of property firm Resi Analysts. “I wouldn’t be surprised if we saw short-term numbers like China’s.” There, in the first three weeks of February, sales volumes dropped by 90 per cent, according to analysis by Capital Economics of 30 major cities.