Knight Frank forecast that residential property sales will fall by 38% this year, amid the coronavirus pandemic.
Based on the assumption that current movement restrictions are maintained through to the end of May, the company’s view is that sales across the UK will total around 734,000 for the full year, a 38% decline from the level seen in 2019, with slightly smaller falls seen in Greater London and in the prime central London market.
The property firm also predicts that the drop in property transactions will place downward pressure on values, with mainstream UK house prices expected to fall by 3% in 2020, although London-based properties should only fall by 2%.
By contrast, Knight Frank expects prime central London properties to retain their value throughout the year.
“The government understands that moving house has enormous knock-on benefits for the wider economy,” said Tom Bill, head of London residential research at Knight Frank. “Anything it can do to kick-start the process once lockdown measures are relaxed will have ramifications far beyond the housing market.”
He added: “A material cut in stamp duty or an extended SDLT holiday should be central to these efforts.”
Knight Frank expects to see a revival in activity next year, with volumes in 2021 expected to be 18% above the level seen in 2019, although this expansion will not fully offset the drop in 2020.
Of the nearly 526,000 sales we expect to be “lost” this year, fewer than half will be carried into 2021.