Whilst no one is sure how long this surge will last, moves by the government to help boost the housing market, such as the stamp duty holiday announced last week; proposed changes to planning permission and an extension to the affordable homes programme, will help maintain confidence and activity, and early signs from lenders and estate agents are good.
Halifax has said that despite a 0.1% dip in house prices in June 2020 and a 0.9% reduction during the period April to June 2020 based on the previous three months, house prices are actually 2.5% higher than they were during April to June last year. The bank also saw a 100% increase in mortgage applications in June 2020 over the previous month and said that those who were looking to buy before the market was put on hold in March are revisiting the same purchase plans.
The property website, Zoopla, has recently carried out a survey which has shown that 86% of people who were planning to move before the COVID-19 shutdown are still going ahead with their plans. Of those who have delayed their plans, 31% say they are concerned about a downturn in house prices and 30% are worried about the effect of COVID-19 on the UK economy. It may be that the government’s recent incentives will alleviate some of those worries, enabling more people to carry on with their moving plans. Zoopla has forecast that demand for housing will remain steady and that growth in house prices will remain at +2%, estimating that house prices will not start to fall until at least the end of the year.
Zoopla also indicated at the beginning of July that, whilst demand for older homes is still higher than it was pre lockdown, at an increase of 46%, interest in new-build properties has fared even better, rising 66% since the end of the property lockdown on 13th May 2020. Much of the interest is with first-time buyers, where demand has risen 87% compared with during lockdown. Homebuilder, Persimmon Homes, said that the buyer demand rebound rate is ‘remarkable’ with a 215% uplift in buyer leads from Zoopla in the month following the reopening of the housing market. Those using the Help to Buy Equity Loan Scheme, which can only be used to buy new-build properties, will have helped fuel interest in this market.
Caroline Murray, partner and head of Graysons’ property team says:
“It’s good to see the property market bounce back with such vigour, demonstrating buyers’ and sellers’ confidence. It will be interesting to see how house prices move over the next few months, but with the strongest rebound in sales (subject to contract) being in northern England, including in Sheffield where increased sales of up to 20% over February 2020 have been recorded, it can only be good news for the city.”
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Author: Caroline Murray, partner and head of Graysons’ property team.
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