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More than 370,000 house sales worth £82bn on hold due to lockdown

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28/04/2020
More than 370,000 property transactions estimated to be worth £82bn have been suspended since the government triggered lockdown measures to control the coronavirus outbreak, according to Zoopla.

The majority of these 373,000 sales, says the firm, were agreed between November and February and earmarked for completion between April and June.

A small amount of sales, where viewings and valuations took place before the lockdown in March, are still progressing.

New sales agreed are running at a tenth of that recorded in early March, with volumes similar to levels normally seen in December.

The rate of fall-throughs peaked on 23 March, the day of the lockdown, and has fallen back as the volume of new sales being agreed has declined.

The outlook for sales progression depends on how long the restrictions remain in place, the scale of the economic impact, and how this impacts would-be buyers and their ability to proceed with sales, said the firm.

Zoopla’s latest forecast is that completed sales will be 50 per cent lower in 2020 than 2019, allowing for a proportion of stalled sales to complete and with a delay to sales that would have progressed.

However, the property portal’s report did show signs of sellers’ commitment to the housing market, with the number of sales just four per cent lower than levels registered at the beginning of March.

Declining demand

The demand for housing fell by 70 per cent between the start of March and the week ending 29 March, with the greatest decline recorded ahead of the lockdown.

The drop in demand reached its lowest in early April and has since started to improve slowly from a low base.

Despite a steady increase in buyers looking for homes, demand still remains 60 per cent below the levels recorded at the start of March.

Viewings of online property listings fell in line with demand, but not as sharply. Levels have bounced back more strongly over the last three weeks, but remain 35 per cent lower than at the beginning of last month.

Zoopla’s report tracks property demand by city across the UK. It showed an 80 per cent fall in demand in Cardiff and a 48 per cent decline in Newcastle where market conditions were already weaker.

Bouncing back

Over the last two weeks, demand for housing in cities across northern England has rebounded more strongly, particularly in Manchester, Liverpool and Leeds.

These cities started the year strongly and housing affordability remains attractive. Zoopla predicts the housing market could bounce back quickly when restrictions are lifted.

Higher value cities such as Cambridge, Edinburgh and Southampton have not yet recorded any material improvement in demand over the last few weeks. There are still low levels of demand but a limited improvement so far.

Richard Donnell, director of research and insight, said: “There is a two speed housing market at present. Parts of the market are at a virtual standstill as a result of the physical restrictions that have stopped new supply coming to the market and the viewing of homes for sale.

“However, the online browsing of homes for sale and buyers expressing interest in property have been rising off a low base over the last two to three weeks.

“Without doubt, once the coronavirus restrictions are relaxed, we should expect the release of demand that has been building since Brexit and political uncertainty destabilised market sentiment.

“That said, the case for a stamp duty holiday to support a resumption of market activity is clear and a high proportion of savings are likely to be spent, further stimulating economic activity,” he added.

 

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