Reports of a housing price crash are unfounded in Norfolk
Published 3 June 2020
Disrali once said "Lies, damned lies, and statistics", describing the use of statistics to bolster weak - or perhaps poorly researched - economic arguments. For the Telegraph – and others - to report that there has been a 90% fall in house sales in March/April, compared to ‘normal’ is the reporting of a fact. 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! It’s a bit like saying that over the same period, the sale of draught beer has dropped by 90%, which means Britain has decided it doesn’t like drinking draught beer any more! The lack of access to a product or service, especially when enforced by law, does not equal a lack of demand.
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 i.e. anyone who had to physically move. So the majority of the property market was in atrophy. House price growth comes as a result of demand, ability, affordability and transaction volume, and when transactions are artificially stopped, and without a sensible contextualising narrative, the resulting statistics are going to be misleading.
Since lockdown was released for the property sector in the middle of May, the volume of activity in viewings, offers, people wanting to come on to the market has been 3 or 4 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 15-20% below asking price. But the property sector is not claiming a ‘house price boom’ as a result of this surge of activity, because this is not ‘normal’ either. Although June is traditionally one of the busiest months for house 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 of 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. So let’s be calm and sensible about this. If you want to sell, the summer is always favourable for bringing your property to the market. The unique added factors this year are (1) the surge in demand we are now seeing and (2) 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, because of all of this, how much they need a garden and some outside space to be able to socially distance from their own family members...
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