The spike in demand for homes after the housing market reopened in the UK is beginning to translate into sales agreed, now that sufficient lag time has passed. Sales agreed have now rebounded to pre-Covid-19 levels, according to the latest House Price Index from Hometrack.
Continuing demand is also driving much-needed new supply, as households searching for homes will then list their own homes for sale. Six weeks on from the English market reopening and sales agreed are 4 per cent higher than pre-Covid-19 levels - despite prolonged market closures in Scotland, Wales and Northern Ireland.
Demand for housing remains 46 per cent above the levels of early March, but it has started to weaken over the last two weeks - falling 8 per cent since 11 June. This is not surprising given the sheer strength of the initial boost in demand.
Elevated levels of demand and less available supply of homes for sale, which are 15 per cent lower than a year ago, is creating upward pressure on house prices - for example, the asking price of homes sold in June are up 7 per cent year-on-year.
In May, UK house prices grew by 2.4 per cent while the city average growth was 2.1 per cent. It is predicted that the UK house price growth will remain within the +2 per cent to +3 per cent range over the next quarter, with downward pressure on prices materialising later in 2020. The surge in demand for property is expected to delay house price falls, pushing them towards the year-end.
"We’re entering a phase of supply and demand rebalancing, as reopened markets across England, Wales and Scotland look to replenish the missing 15% of stock compared to this time last year. "With the winding down of furlough schemes and employment uncertainty still on the horizon, the economic effects of COVID-19 on the property market are yet to be fully realised." David Ross, Managing Director, Hometrack