Covid-19 update

HM Land Registry latest price data


HM Land Registry published the latest price data on 28th August 2020 which can now be viewed on The Move Market.

We now have some data that is related to transactions that have been agreed since the Coronavirus outbreak.

The transaction figures are substantially down on 'normal' housing market activity levels - typically last year we'd see around 90,000 transactions per month.

Some of the missing transaction volume may be still due to ongoing operational issues at HM Land Registry with many employees being forced to work remotely.

It is still important to note that with transaction volumes so low, the negative impact of Coronavirus is yet to be fully understood with regard to its impact on property prices.

We expect a more realistic picture of sale prices to start to show at the end of August 2020 and more likely the impact will start to really show in September and October's figures and be felt all the way through to the end of the year.

Valuations


The impact of Coronavirus is widespread and is affecting not just the health and well being of people but businesses profitability, jobs and house prices.

The full impact is yet to be seen but one thing that is certain is that people will have less money and lower job security over the next 12 months.

How negatively this affects the property market and prices that buyers are prepared to pay will start to appear shortly.

Generally, in economic slumps, house prices fall - this hasn't happened just yet though for a few reasons:

  • Property prices are typically published with a 2 month delay (i.e. say a person completes their sale and moves in January, the sale data will only be published by HM Land Registry in March).
  • Some property that completed in April and May, will have exchanged earlier in the year before the real impact of Covid-19 was known and so won't fully reflect the change in prices because of the virus.
  • To keep property valuations on The Move Market representative of the real market, we have set a manual adjustment (-1.6%) to all property prices to factor in a moderate decrease in consumer confidence, jobs and salary expectations over the next year.
  • We will re-evaluate the need for the manual valuation adjustment and keep any manual adjustments published here.

HM Land Registry record the official sale price of all property transactions in the UK


HM Land Registry data is normally released with a lag of about 2 months, so a property sold in the middle of April would normally be published at the end of June.

At the moment they are still struggling to release data on time - so we are only seeing a small proportion of the property sales that have completed.

HM Land Registry latest update (on the 28th July) contained just under 10k transactions relating to May. Whilst volumes are probably down, it still looks like HM Land Registry may still be struggling to publish transaction data on time.

Since the UK was under lockdown from the end of March through to mid-July, very few property sales are likely to have completed since the virus outbreak.

What does all this mean?


Upon the next HM Land Registry data publication, we expect to see very low transaction volumes with more volatility in price indexes.

Be wary of other media sources citing price falls and valuations. They may be drawing conclusions based on such a small sample of data that they may not be statistically significant (i.e. they don't have enough data to make such a bold conclusion but they want to sell papers!)).

Check back here regularly as we will update our valuations as soon as HM Land Registry publish more data.

Making an offer


Given the current economic uncertainty, property prices are likely to be weaker for some time, with more downward pressure up until the end of the year.

This doesn't necessarily make it a bad time to buy though. As long as you do your research and put in a good offer, you could end up profiting nicely once the virus passes and normality returns.