Momentum in the property market
The UK housing market started autumn with momentum following a post-lockdown mini-boom making summer 2020 busier than usual. This is according to Member of The Guild of Property Professionals, Melissa Lines of George F. White, who says that the housing market has basked in summer sunshine since it reopened.
“Buyer demand has soared, with sales agreed up 50% on October last year according to Rightmove, while supply to the marketplace is at its highest level since March 2008. Over 98,010 property sales were recorded in September, which is up 21.3% on August, with competition in the market-leading to one in eight properties selling at or above the asking price. Larger properties and those with gardens are proving immensely popular, with the impact of COVID-19 set to have a lasting change on our home and work lifestyles,” says Lines.
She adds that both the economy and consumer confidence have both shown signs of improvement throughout the last quarter. The economy grew by 1.1% in September (ONS), however, it remains over 8.2% lower than pre-lockdown, while consumer sentiment continues to rise, albeit slowly. Recovery remains cautious as the government grapples with balancing the economy and public health. Stamp duty holidays across the nations offer a saving for many buyers, however, while interest rates remain low, a reduction in high loan-to-value lending products is impacting first-time buyers,” Melissa comments.
She continues that properties are selling quicker than they did a year ago, and the latest UK house price growth is at its highest level in over two years and revised forecasts anticipate property prices will end the year 7% higher, a significant reversal to the negative expectations anticipated as the market reopened. Interest rates are predicted to be held at 0.1% until 2022.
In the lettings market, as with the sales sector, demand for rental property increased over the summer, although new instructions remain muted, a continuation of the pre-lockdown trend. Average rental values across the UK rose by 1.5% in the year to August, and yields remain attractive. Increased demand and a shortage of supply in many areas should help underpin rental values over the coming months. Just 13% of tenancies expire during the final quarter of the year but landlords will be keen to avoid unnecessary void periods.
Melissa Lines adds that property prices in the region saw an increase of up to 5.6% in part of the North East since the housing market reopened in June. Activity across the market has been brisk, nationally the average time taken to sell a property fell to a record low of 49 days in October (Rightmove). “Sensible pricing remains crucial, as correctly priced properties are nearly twice as likely to be sold ‘subject to contract’ within four months of listing than those that have had their asking price reduced.
Even during the current lockdown activity levels have remained buoyant as both buyers and sellers see the opportunity to save money by ‘beating’ the Stamp Duty Holiday deadline at the end of March 2021.
There may well be a brief lull at Christmas as families take respite from what 2020 has thrown at us all but George F. White believes that January will see the market return strongly as consumer confidence returns and the wider economy continues its bounce back from the pandemic induced slump.
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