Spare a thought for the poor estate agents

The suspension of the residential property market is disheartening for those who were hoping to buy a first flat or new-build house this spring. But spare a thought also for estate agents, who are usually well back in the queue for public sympathy but are nevertheless a familiar part of our high-street fabric, their windows and websites feeding the national aspiration to home ownership that also fills so many hours of Kirstie-and-Phil television.

With government urging completions to be deferred, mortgage lenders tightening their terms, viewings and removals impossible and shares in the bellwether London agency Foxtons down by half, the whole sector is now in what Niraj Shah of Bloomberg Economics calls ‘an induced coma’. The search site Zoopla’s estimate that trans-action volumes will fall by 60 per cent looks, frankly, optimistic — and the more pertinent question is what will happen in September or October, when pent-up demand is released to meet a wave of distressed sellers. Mortgage availability and government support schemes will be key factors, but my guess is there’s bound to be a sharp fall — and that won’t be an entirely bad thing.

In the 2008 crisis and its aftermath, average UK house prices fell by around 17 per cent, then took five years to recover. But between the injection of George Osborne’s Help to Buy boost in 2013 and the onset of Brexit nerves in 2016, they surged by 37 per cent in the south-east, creating huge obstacles for would-be buyers wanting to live within commuting distance of London and a sense among twentysomethings that they may never be able to climb onto the property ladder at all.

If the market reopens in the autumn with sales being agreed at, say, up to 20 per cent below pre-virus levels, those who bought on big mortgages in the past couple of years may find themselves in ‘negative equity’, a peril of the early-1990s property slump that eventually went away when prices recovered.