Predicting how much house prices may fall this year is a bit like playing lucky dip. Roll the tombola and see what number you pull out.
It may be 3pc, suggests Capital Economics, or it might be 13pc, says the CEBR, another think tank. These are all based on extensive research, but until we know when the lockdown might end and the true scale of the impending recession, these numbers mean little.
It’s also unclear what will practically happen when the housing market is finally restarted: will someone selling their home really want to open it to potentially virus-carrying viewers? Will those who need to move house flood the market with homes for sale, in the process pushing down prices? Will there be a dearth of new homes ready to move into, as construction firms have downed tools for months?
With so much uncertainty, it may be more helpful to understand where the pressure points in the property market are – and if they look likely to spark a house price crash.
Since the financial crisis, owner-occupiers have been subject to stricter mortgage regulation, a hangover from a time when banks allowed many to buy beyond their means. A steep fall in house prices is often caused by forced sales, when economic circumstances lead homeowners to sell at whatever price they can.
But with record low interest rates and huge levels of government intervention, analysts are cautiously optimistic that the level of repossessions and fire sales seen during the financial crisis may be avoided. However, if the huge package of measures from the Treasury is not enough to stem mass unemployment, this could feed into a panicked response in the property market.
For investors, the situation looks bleak. After being pummelled by tax hikes and changes to mortgage interest tax relief, and squeezed by shrinking yields, this may be the crisis that finally ends the buy-to-let dream – and spurs house price falls.
The economic situation will hit renters the hardest, the very people who landlords make their money from. A survey of renters in the Guardian found that one in five had been forced to choose between food and bills or paying rent, while six in 10 said they had suffered financially due to the shutdown. On average, a renting household spends a third of their income on rent, so even a temporary reduction in earnings will make many unable to pay.
New research by Shelter shows that 1.7 million renters expect to lose their job in the next three months, and 23pc of those surveyed said losing their job would leave them immediately unable to pay their rent. Meanwhile, universal credit will not cover rent payments in many areas of Britain.