An international property agents claims that because of the pandemic house buying confidence has been hit hard, which will almost certainly mean that in the short term property prices will fall between 5% and 10%.

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However according to the firm’s May UK Housing Market Update the fall will be substantially less than the catastrophic drop in house prices during the Global Financial Crisis of the early 1990s.

The signs of a wider economy recovery which will dictate how long it will take for housing prices to bounce back are not optimistic.

Oxford Economics’ May forecast predicts that the UK’s Gross Domestic Product by the end of 2024 will be 0.7% lower than it thought in April, and the Update says “This will have a knock-on effect on household incomes.”

However one positive is that interest rates should lower for a longer period says the Update’s authors: “Our November forecast for 15 per cent UK house price growth over the five years to 2024 included an assumption that the Bank of England base rate would rise to 2 per cent by the end of that period. Oxford Economics’ current forecast is for it to be 1 per cent.

“The trade-off between borrowing costs and income rises will determine the medium term outlook for house prices, once the initial crisis has passed.”

The market is starting up again and short term activity will be fuelled by potential buyers left frustrated by the lockdown restrictions will be further inclined to move. Interestingly enough the pandemic has caused many buyers to now look at properties in the countryside and those with more space.

One other point is that there is a greater chance the new homes’ market will recover faster, as it will be far easier to have socially distanced viewings and virtual viewings will give a truer picture of a property.

“While this bodes well for an increase in activity, it is starting from the exceptionally low levels observed during lockdown. Data from the main property search portals suggests that sales agreed and new listings were at around 10 to 20 per cent of the levels seen immediately before the lockdown, although buyer browsing levels have been higher.”

There was little activity in new mortgage approvals in March which was its lowest level since Q1 2013, the drop was further accentuated by February’s extreme activity which was the highest since 2014.