The government gave the green light to freeing up the housing market from Covid-19 restrictions on May 13th. Since then we have seen conflicting reports of surging interest, as the pent-up demand built up over the previous two months was released, offset against claims of falling prices as buyers try to take advantage of job insecurity and worries over the economy.
In these circumstances we should leave it to estate agents, those closest to the market, to keep us informed us of the situation on the ground. We reported previously that property portal Rightmove claimed to have had its busiest day ever on May 27th, with more than 6 million visits to the company’s website. Backing this up in a blog posting Rightmove recently announced 40,000 new sales since the market reopened, with buyers offering an average of 97.7% of the asking price. Asking prices were said to be up by an average of 1.9% compared to early March, before the lockdown was put in place. There could of course be price adjustments – up or down – prior to contracts being exchanged, when the buyer and seller are then committed.
Rightmove also reported record numbers of home owners requesting property valuations, as well as seeing an increase in listings added to their website compared to a similar period last year. During the lockdown property sales were 94% down on last year, but have now recovered to a fall of just 3% compared with a year ago. Rightmove claimed to have seen their 10 busiest ever days in May and June, with potential buyers and renters spending over 955,000 hours collectively on their website on 6th June.
Rival property website Zoopla has announced similar upward trends in sales volumes and prices, with figures already almost back to the levels seen in early March. Zoopla claims that average prices for agreed sales were showing 6% higher than in June 2019, and that demand is currently 54% up from the level seen at the beginning of March this year. The company claims that agreed sales are currently just 12% below the level reached before the lockdown, and that since the market was reopened volume has risen by 137%.
Zoopla’s Director of Research Richard Donnell commented: “The rebound in housing demand is not solely explained by a return of pent-up demand. Covid has brought a whole new group of would-be buyers into the housing market. Activity has grown across all pricing levels….as people look to trade up. New sales in London are lagging as buyers look at commuting and moving to the regions.”
Rightmove’s Miles Shipside added: “There are no signs of panic selling or even a price dip. On this evidence buyers may now be trying to exchange quickly, as there are signs of pent-up demand and upwards price pressure, rather than downwards.”
Whilst pleased with the early reaction to the reopening of the market, many property professionals are, however, expressing caution regarding the longer term. Quite simply, no-one knows how quickly the UK economy will rebound from the worst effects of the lockdown, nor whether recession will bite once markets get back to normal.
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