Published: 09:49, 13 April 2020
| Updated: 10:50, 14 April 2020
Despite government financial packages to combat coronavirus' economic impact, it's claimed the average home's value will fall by an eighth by the end of the year.
Amid the coronavirus pandemic, which has caused lockdowns and recessions across the globe, experts predict the average house price in the UK will fall by 13% in 2020.
The Centre for Economics and Business Research published a forecast on the "major economic shock" caused by efforts to slow Covid-19's spread.
On average, the group has predicted a value reduction of £38,000 in 2020.
Another prediction made by the economics consultants is that the average UK worker could lose 35 percent of their income over the next four months.
It is this figure, and the resulting increased dependence on savings, that the Centre (CEBR) say will affect the house price.
Particularly affected will be the private rental sector as tenants face unemployment of reduced pay, which the CEBR say will start a domino effect onto private homeowners' properties.
In its report, the CEBR found: "Although the government have offered up a vast package of support, this lack of demand will mean some businesses cease to operate, many workers will lose their jobs and a lot more will face a cut in incomes.
“Housing is the single biggest expenditure item for faced by most households, which means that the shortfall in incomes has a tremendous potential to disrupt the UK’s housing markets.
"Moreover, the crisis will have different impacts on renters and those with a mortgage.
"The private rental sector could be particularly exposed, with 47% of private renters under the age of 35 and studies showing that those under 30 are much more likely to have already lost their job or be on reduced hours."
Spencer Fortag, managing director of Medway-based Dockside Property Services, has sought to dispel the dismaying prediction.
He said: "The Kent property market is less exposed than it was in the previous four historical property crashes in 1972, 1979, 1988 and 2008 and I think that's for the following reasons.
"Before each of those four crashes, there had been a significant upward spike in property values prior to the crash. We've not really experienced that in the country over the last 12 months.
"The report says this house price drop will be caused by unemployment yet historically it's been proved house price falls aren't caused by high unemployment.
"We have furloughing now don't forget - the government's stood up and is offering to pay 80% of certain people's salary so I don't think it'll be as much of an issue."
Mr Fortag also noted the significant bounce-back of housing markets in Chinese cities that have scaled back lockdown measures in the last few weeks.
In the South East, house prices are expected to drop 11% which means the region will fare better than all areas except Scotland.
The hardest hit areas of this house value crash will be Yorkshire and the Humber as well as Northern Ireland, as these areas have the highest percentage of jobs relying on the worst hit industries during the pandemic - manufacturing, construction, retail, and hospitality.
In these two regions, 60% and 59% of the workforce is affected by the coronavirus respectively.