HOUSE sales are set to plummet by as much as 60 per cent over the next three months, as the market reacts to the impact of Covid-19, a report suggests.
Research by property website Zoopla indicates a fall in transaction volumes of up to 60 per cent over the second quarter of 2020, compared with same period in 2019.
And some individual months this spring may even see newly-agreed sales down by up to 80 per cent on last year, given the shutdown of normal life and knock-on impact for the market, Zoopla suggested.
Low sales volumes are also expected to continue into the third quarter.
It comes as government figures showed UK house prices were around £3,000 higher on average in January than a year earlier - but they do not reflect the impact of coronavirus on the housing market.
Across the UK, property values increased by 1.3 per cent over the year to January 2020 to reach £231,000 on average, according to the Office for National Statistics (ONS) and Land Registry.
Richard Donnell, director of research and insight at Zoopla, said: "Covid-19 presents a major new challenge - not just for the housing market but for the UK and global economies.
"Fifty years of history shows that external shocks have impacted the housing market to differing degrees, largely down to the scale of direct impact on the UK economy.
"The initial impact of external shocks is to reduce consumer confidence and put a brake on housing demand and the number of people moving home, which we can see in our latest figures."
Before the outbreak, the housing market had got off to its strongest start for four years, according to the UK cities house price index from Zoopla.
But it said the social distancing strategy introduced to limit the spread of the coronavirus had created an immediate impediment to property viewings and valuations, which are integral to buying and selling a home.
The number of previously agreed house sales falling through is also gathering pace, as wider economic uncertainty prompts people to think again.
But the market has not ground to a complete standstill, as sales continue to be agreed, albeit at a slower rate, down 15 per cent on last week.
Buyer demand over the seven days to March 22 was down 40 per cent on the level recorded one week prior, Zoopla said, as would-be home buyers took stock of unfolding events in the UK and around the world.
It said the toughened restrictions announced this week would see demand fall further in the weeks ahead.
The report said purchases already agreed and moving towards exchange of contract were continuing, but a "rapidly growing" proportion of sales were starting to fall through, as buyers reassessed the necessity of a large financial decision.
Fall-through cases last week were 60 per cent higher than the previous week, but Zoopla added that new sales being agreed still remained higher than fall-throughs by some margin.
