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About $1 billion in resi broker fees are on ice in the UK

Sellers haven’t pulled their listings from the market, which means it could bounce back quickly

The coronavirus pandemic put $102B worth of U.K. home sales – and $1B in broker fees – on ice. Buyers are returning to the market and sellers never really left, possibly setting up the market for a quick recovery. (Prime Minister Boris Johnson by STEFAN ROUSSEAU/POOL/AFP via Getty Images)
The coronavirus pandemic put $102B worth of U.K. home sales – and $1B in broker fees – on ice. Buyers are returning to the market and sellers never really left, possibly setting up the market for a quick recovery. (Prime Minister Boris Johnson by STEFAN ROUSSEAU/POOL/AFP via Getty Images)

The coronavirus pandemic and government mitigation measures have put a hold on around $102 billion worth of home sales set to close in April and June in the United Kingdom.

Around 373,000 deals were put on hold during that period, according to a Zoopla report cited by Bloomberg. That translates to about $1 billion worth of brokers fees tied to those sales that are on hold.

Many prospective buyers stopped searching for homes in March as the pandemic ramped up globally. The number of prospective U.K. buyers browsing Zoopla’s listing platform fell 70 percent that month, but recovered somewhat in the first few weeks of April.

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Canada and the United States experienced similar dips in searches. Searches have bounced back in the U.S. and now exceed pre-pandemic levels, according to a RentCafe report.

U.K. sellers meanwhile did not pull back. Many kept their listings on the market — the number of properties for sale this week was just 4 percent lower than the number on the market at the beginning of March.

That means the market could pick back up once the British government lifts its restrictions, but even so Zoopla projects there will be about half as many completed sales this year as there were last year.

Prime Minister Boris Johnson, who himself recently recovered from Covid-19, this week promised a “comprehensive plan” to re-open the country. He said the U.K. was “past the peak” of the disease. [Bloomberg]  — Dennis Lynch