Post-lockdown “mini housing boom”
Pent-up demand from the coronavirus lockdown and a desire to leave London meant that Brits bought and sold a record number of homes between mid-July and early August, bucking the usual summer slowdown, according to Rightmove.
In addition, homebuyers have been keen to take advantage of the stamp duty holiday announced by chancellor Rishi Sunak on 8 July. Under the changes, homebuyers in England and Northern Ireland will not pay any tax on homes up to £500,000 until 31 March 2021.
Rightmove reported the highest number of home sales agreed since it began tracking the data more than 10 years ago, with transactions more than 20% higher than the previous record.
Average asking prices for August, based on data collected between 12 July and 8 August, were 4.6% higher than a year ago.
Rightmove said it had seen more homes put on the market than in any month since the global financial crisis hit more than 12 years ago.
Miles Shipside, Rightmove director, said: “Rather than just a release of existing pent-up demand due to the suspension of the housing market during lockdown, there’s an added layer of additional demand due to people’s changed housing priorities after the experience of lockdown.
“The out-of-city exodus has helped push prices to record levels in Devon and Cornwall, for example, where working from home means a different lifestyle much closer to your new doorstep.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The housing market is receiving added impetus not just from buyer and seller post-lockdown pent-up demand but from others bringing forward moving decisions prompted by the stamp duty holiday. Despite some suggestions the momentum may fizzle out, there is not yet any sign of bad economic news raining on the parade.
“On the contrary, a more broad-based sustainable recovery may be underway with increased activity in most price ranges. If anything, the market is more likely to be restrained by lender delays in mortgage underwriting than a drop in buyer enthusiasm. Prices are not rising significantly as the increase in listings is helping to balance the market and in any event most buyers seem aware of the risks of overpaying in generally uncertain times.”
Craig McKinlay, new business director at Kensington Mortgages, said: “Between a stamp duty break and a Help to Buy extension – these measures have created a mini housing boom, seen in the highest number of monthly sales in more than a decade and the highest number of properties coming to market since 2008.
“Although there’s speculation that a ‘bust’ will follow once these measures are eased, we need to remember that the foundations of the market remain strong despite the wider economic environment and that some help is better than no help at all.”