House prices to nosedive by 14% in New Year, predicts leading research body

first_imgHome » News » Housing Market » House prices to nosedive by 14% in New Year, predicts leading research body previous nextHousing MarketHouse prices to nosedive by 14% in New Year, predicts leading research bodyWell known for its prescient economic reports, the CEBR says prices will begin to drop dramatically once the stamp duty holiday and furlough schemes come to an end.Nigel Lewis15th September 202002,497 Views House prices will drop by nearly 14% once the ‘transitory and temporary’ measures within the housing market and economy are removed over the coming months, a leading economic research body has predicted.These measures include the ending of both the stamp duty holiday, furlough scheme and pent up property demand, plus the expected post-Covid economic downturn.The respected Centre for Economic and Business Research (CEBR) whose reports are pored over by politicians including Rishi Sunak, says the ending of chancellors’ £3.8 billion stamp duty holiday is likely to be the most significant reason why house prices will slide so dramatically.For example, Carter Jonas says that across its branch network the stamp duty holiday has ushered in weeks of strong demand, increased supply levels and higher-than-expected sales, with its southern offices recording a 51% increase in enqjuiries.stamp duty cutThe CEBR says: “We estimate that July’s stamp duty cut will have brought about a 1.2% increase in average prices and a 6.0% rise in the number of transactions compared with what otherwise might have happened,” its says.“The temporary nature of the tax reduction means that the policy’s short term effects could be even more dramatic, as people rush to complete transactions before the return to the previous stamp duty regime at the end of March 2021.”CEBR also estimates that a pent-up demand of some 150,000 delayed sales is currently pumping through the housing market, and that house prices are rising because buyer demand has rebounded faster than supply.“Our analysis suggests that prices will start to fall significantly towards the end of the year and the first half of 2021 (though there might be a short spike as the stamp duty reduction comes to an end), with average house prices forecast to be 13.8% lower in 2021 than in 2020,” the CEBR predicts.Read the CEBR report in full.cebr Centre for economic and business research September 15, 2020Nigel LewisWhat’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.Related articles BREAKING: Evictions paperwork must now include ‘breathing space’ scheme details30th April 2021 City dwellers most satisfied with where they live30th April 2021 Hong Kong remains most expensive city to rent with London in 4th place30th April 2021last_img read more