After the lockdown was announced by the U.K government, many expected buyers and sellers took a cautious “wait and see” approach. However, the most recent national by Halifax illustrates that the sector is recovering quickly.
Many sellers were not able to list their properties with their local agents or letting platforms because viewings were not allowed. Hence, new listings reduced from 6,000 new ads per day to less than 1,000. This lasted until mid-May when the government allowed viewings with social distancing measures in place.
According to TwentyEA, listings rapidly began to increase to previous levels. The report reveals: “Based on pre- and post-COVID volumes, we would have expected to see around 837,000 new properties listed, instead, we saw 552,000. This is a loss of 285,000 or a 34% drop in new instructions.”
This supply and demand imbalance leads to the prices to rise in most cities of the U.K.
Bases on TwentyEA report, there was only less than 20% drop in transactions. There were around 310,000 exchanges that took place in this time frame.
Also, since the stamp duty holiday was announced there have been many more property transactions. This is a great opportunity for first-time buyers also people who would want to buy higher-value properties in the capital and other major cities.
According to TwentyEA, while many people across the UK held off from buying or selling during the peak of lockdown, this was not the case for everyone. The number of new buyers will continue to increase due to the factors above.
Based on the Halifax house price index last week, there has been a record annual property price growth of over 5% in August, and almost 2% increase from the previous month. This surge was powered by a combination of elements, such as the pent-up demand, quantitative easing by BOE, stamp duty holidays, and capital injection from overseas buyers especially investors based in Hong Kong.
While Halifax warns this level of growth in property prices is not likely to be sustained, it undoubtedly indicates the degree of optimism currently linked to the UK housing market.