Great news of people looking to sell their property in the next few months. According to the latest house price index from Zoopla there has been a surge in demand for property. This is great news for sellers as this surge has had a knock on effect and is expected to halt house prices from falling right up until the end of 2020. Since the English market reopened six weeks ago it was reported that sales agreed were 4% higher than pre-covid levels, despite the prolonged closures in Scotland, Wales and Northern Ireland.
Zoopla believes that the elevated levels of demand and less available supply of homes for sale is creating an upward spike in house prices, with June’s asking prices up 7% year-on-year. With sales agreed due to complete between August and October 2020, research indicates that this will cause the UK house price growth to remain in the +2% to 3% range over the next quarter. Therefore, this means that house prices are not expected to fall until the end of 2020.
Zoopla expects the rebound in activity expected to subside in coming weeks, due to low product availability at 90% LTV and above, but says the reopening of Welsh and Scottish markets will support near term demand.
Richard Donnell, director of research and insight at Zoopla, said: “The rebound in housing market activity has taken many in the industry by surprise. It is welcome news given the projections for falling economic growth and rising unemployment. Estate agents and developers are responding and using the upsurge in demand to rebuild their sales pipelines and open up their developments.
“We see returning pent up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown. House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.
“While the average asking price for homes marked as sold on Zoopla are 7% higher than a year ago this is down to an increase in sales in higher value markets where activity has remained subdued in recent years. We do not expect the rate of growth in the Zoopla House Price Index to reach this level, rather it is expected to hold steady at 2%.
“The Welsh housing market opened this week and levels of demand have already returned close to the levels seen in England in anticipation of the market reopening. Scotland, where the market reopens on 29 June has also seen demand rise back to pre-COVID levels but sales remain more than two thirds lower and are expected to rebound in the coming weeks.”