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House prices set to fall in January and February

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The housing market has boomed in 2020 but is on course for a New Year correction
House prices set to fall in January and February

House prices are set to fall in January and February as the post-lockdown boom ends, according to Reallymoving.

The home moving services business said that the New Year will ‘herald a turning point for the housing market’, with a Christmas peak in prices followed by negative growth of -1.2% in January and -2.5% in February 2021.

It added that the UK’s average house price will reach a new high of £352,239 in December before the correction begins and it falls to £343,312 by February 2021.

How does it know?

Reallymoving collects data at the beginning of the homebuying process, when buyers agree a deal and seek conveyancing quotes.

It claims this provides one of the earliest snapshots of the short-term property market outlook and confirms that the post-lockdown boom will come to an end at Christmas, with prices beginning to decline heading into the New Year.

CEO Rob Houghton said: “The mask is beginning to slip on the two-tier housing market of recent months, which has seen activity from equity-rich homeowners who are less affected by the pandemic, concealing problems at the lower end of the market where First Time Buyers have benefited little from the stamp duty holiday and faced considerable challenges securing higher loan to value mortgages.

“The kind of growth we’ve seen over the last few months was never sustainable. Despite positive vaccine news, which will certainly boost confidence that the end of the pandemic is now in sight, there are significant challenges for the housing market to overcome in the short term, including the end of both the stamp duty holiday and the furlough scheme on 31st March, which is likely to result in further downward movement in prices over the first half of next year.”

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