Housing market picks up but sales still 50% down on last year

Sales in May were 16% up on April after the housing market was reopened

House sales have started to pick up from the depths they hit during the worst of the coronavirus lockdown, but the number of properties sold has still halved compared to this time last year.

Figures from HM Revenue and Customs (HMRC) show that 48,450 properties were sold in May – the month the Government eased its lockdown restrictions on property.

This was up 16% on April when sales fell to a record low of 41,760.

Despite the property market showing signs of recovery, the number of sales is down nearly 50% compared to the same time last year when 96,050 homes were sold.

The data from HMRC shows that property transactions have decreased to levels not seen since 2008 and 2009 at the peak of the global financial crisis.

When the lockdown was introduced in March, estate agents, buyers and surveyors were banned from visiting properties, bringing the housing market to a grinding halt.

The Government eased these rules in May, allowing the housing market to start up again. People can now view properties, visit estate or letting agents and move home.

Jeremy Leaf, north London estate agent, says: “As always, it is property transactions rather than the more volatile prices which prove to be a better barometer of market strength and these are no exception.

“Looking forward, listings are increasing which is encouraging and likely to bring more balance. But on the other hand, we have concerns that most of the demand is for smaller family houses rather than smaller flats as aspiring first-time buyers remain concerned over future employment prospects post-furlough.”

Delay in house price falls

The surge in demand for property since lockdown restrictions were eased is expected to delay house price falls, according to property website Zoopla.

Six weeks on from the English market reopening, sales agreed across the UK are now 4% higher than pre-Covid levels, Zoopla says.

With most of these new sales agreed likely to complete between August and October 2020, Zoopla expects UK house prices to grow 2% to 3% over the next quarter.

However, demand for homes is expected to weaken further over summer and into autumn. This is due to mortgage lenders pulling loans for first-time buyers and more people losing their jobs due to the coronavirus crisis.

As a result Zoopla expects any house price falls to be pushed towards the end of the year.

Economists believe the impact of the lockdown on incomes will continue to weigh on the market for the rest of 2020, with some predicting house price falls of up to 13%.

Nick Leeming, chairman of estate agent Jackson-Stops, says: “Those looking to sell their homes this year will benefit from listing their homes on the market sooner rather than later to capture the pent-up demand from when the market was closed.

“These sellers are not only more likely to achieve higher offers but should also secure a quicker sale by listing their homes in the coming months. Currently, we are seeing multiple offers on well-priced country property.”