The UK housing market has been “unlocked” for four weeks now, and the sector has seen a significant rebound in terms of property sales. There’s good news for house prices, too.
Across the UK, property sales have surged by 137% between 13th May, when the housing market was reopened, and June. Over the past month, demand has also lifted back to pre-coronavirus levels, and is currently 54% higher than before much of the market was forced to freeze on 27th March.
According to Zoopla’s latest figures, sales numbers are still slightly lower than they were at the beginning of March. For the first week of June, they were 12% below week one of March across the UK. This could reflect the ongoing restrictions in place across Wales and Scotland, in contrast to England’s restored activity.
The impact on house prices
In terms of house prices, Zoopla also reported a 6% rise compared to June 2019. This is hugely positive news for the industry, although Richard Donnell, director of research and insight at Zoopla, advises caution.
He said: “We still believe that this spike in demand will be short-lived as the economic impacts of COVID start to feed through into market sentiment and levels of market activity in the second half of 2020.”
Buying and selling activity has greatly increased across all pricing levels, says Donnell. However, higher value homes have seen the biggest volume increase since the market began to move again. Zoopla figures show that 16% more properties sold for £1m or more in early June compared to early March.
Higher demand for higher value homes could be a direct result of lockdown conditions. Donnell suggests that COVID-19 has brought “a whole new group of would-be buyers into the housing market”. These buyers could consequently be looking to move to a larger home, or one with more outside space or in a better location.
Growing interest in UK regions
In contrast to the overall spike, sales in London recorded by Zoopla have not seen a great improvement. London transactions are currently 24.8% lower than they were during the first week of March.
At the other end of the spectrum, the north-west has seen a huge rebound of interest. The number of successful property sales in the region is now just 0.9% lower than the figure registered at the start of March. In the south-west, sales are down by only 1.7% now.
Donnell comments that more buyers than ever are now keen to commute into the city. Life in lockdown has changed many peoples’ priorities. While living in the centre of the capital might have once been a desirable choice, the lack of outside space, as well as internal space, will have led many to rethink their situations.
For others, as has been the trend for some time now, there are huge opportunities in cities far from the capital. Manchester and Birmingham have both seen a large influx of London-dwellers relocating there, for both the employment prospects and the better quality of life.
Lucian Cook, Savills head of residential research, said: “This represents a window of opportunity for sellers. However, while transactions have ticked up, this requires pragmatism around pricing from both buyers and sellers, with the latter slightly softening their expectations on pricing.”