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Re-opening of the housing market in England following the coronavirus lockdown, led to a burst of enthusiasm from would–be buyers and a small increase in sales agreed. But, reported online property portal Zoopla, the starting point for renewed activity is a market bumping along at sales levels 90 per cent down on this time last year.
The firm’s latest UK Cities House Price Index found buyer demand across England shooting up by 88 per cent after the market reopened, exceeding pre-lockdown levels. But, said Zoopla, this jump in demand ‘is temporary and expected to moderate in the coming weeks’.
There was less of a bounce in cities in Scotland, Wales and Northern Ireland registered where housing markets remain closed.
Continued Government support for the economy and the availability of higher loan-to-value mortgages will shape the market outlook for the second half of the year, Zoopla concluded.
Although 60 per cent of would-be home movers across Britain said they plan to go ahead with their property plans, 40 per cent have put their plans on hold.
‘After the market was suspended for 15 per cent of the year at one of the busiest times for market activity, a return of pent-up demand was to be expected, especially given the strong start to the year.
‘The scale of the bounce back in demand over the last week (to 17 May) varies across cities depending upon the country in which they are located. Despite a large rise in demand, London’s recovery is lagging behind, alongside cities in countries where the housing market is yet to reopen. Scotland, Wales and Northern Ireland have not recorded any major rebound in demand like that seen across English cities. Demand for homes in London has been partly diluted as would-be buyers look to commuter towns outside the capital in response to COVID’.
Zoopla’s latest data shows that demand has rebounded faster in cities along the south coast and in northern England. Portsmouth and Southampton are registering demand some 40 per cent higher than in February this year with strong growth also recorded in Newcastle and Leeds’.
Zoopla estimates there are currently 373,000 pre-lockdown house sales in progress. By reopening the market, the Government has improved the chances of a higher proportion of these stalled transactions completing.
‘That said, latest data suggests a small pick-up in the rate of fall-throughs since 12 May, but at levels well below the average for this time of year’, said Zoopla.
‘We currently expect a significant proportion of agreed sales to continue, but increased uncertainty over the economic outlook will see housing chains tested in the coming weeks’.
The coronavirus lockdown has created an unexpected boost to housing demand, said Zoopla director of research and insight, Richard Donnell.
‘The economic impacts of COVID will grow in the coming months and uncertainty is building. The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued Government support for the economy.
‘However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution. Further support from the Government can’t be discounted and would help limit the scale of the downside risks’.