Property sales are 28% higher than before lockdown – but will it last?

Housing deals clinched quickly as restrictions eased

Agreed house sales are 28% higher than before lockdown as pent-up demand for homes is released, according to estate agents Zoopla.

Zoopla says there were 124,000 lost sales in 2020 due to lockdown suspending the property market.

But in June, demand from buyers was twice that of the same period in 2019, and Zoopla suggests that this is mainly ‘catch-up’ demand.

Northern hotspots

In some northern cities demand and house price growth have increased over the first seven months of 2020, compared to 2019.

Sheffield tops the list, while Liverpool, Manchester and Nottingham are the fastest growing locations for house price growth.

Zoopla's analysis shows that short-term demand for city living is stable, despite speculation that the pandemic has boosted demand for homes in the countryside.

London ranks fifth for growth in demand since January 2020, and there has been a small shift away from the centre towards the suburbs and commuter belt, as buyers seek a garden and a shorter commute.

The Chancellor’s announcement of the stamp duty holiday gave London an immediate boost to sales agreed.

The research found these had risen by more than a quarter (27%) in just two weeks in the capital, but this has not been seen in other parts of England.

This is because the stamp duty relief is more likely to support demand for higher-value properties up to £500,000.

House price growth

UK house price inflation in the 12 months to June 2020 was 2.7% on Zoopla’s index – the highest level of annual growth for almost two years. 

Richard Donnell, research and insight director at Zoopla, says: “Covid and the lockdown have shifted the dynamics of supply and demand across the housing market. The staggered reopening of housing markets across countries and the added impetus from the stamp duty holiday mean we expect buyer demand and new sales volumes to hold at current levels over the next two months.

“The net result will be continued support for house price growth at current levels over the second half of the year. Regional cities in northern England and the Midlands have the strongest underlying trends.”

However, he points out that rising unemployment will impact on the housing market over the fourth quarter of 2020 and into the first half of 2021.

Market hype

Buying agent and property expert Henry Pryor believes the housing market is turning out to be more complicated than usual.

He says: “If you want to sell, whether you are a landlord or owner-occupier, then my advice is to get on and make the most of it. Estate agents say they are busier than ever but many still have staff on furlough, and those who have returned are having to soak up the work load.

“Those I speak to are dubious about whether this will last and are making the most of it. If you are thinking of buying, then my advice as someone whose business is based on helping people to buy properties, is to wait." 

Pryor believes it is too early to get a full understanding of what’s going on in the market until the autumn.