Post-lockdown mini-boom sees home sales supersede summer holidays
In a change of trends, post-lockdown house sales accelerated during the summer months rather than slow down, according to research by Rightmove.
Normally, a seasonal slowdown in housing market activity is expected during the summer as many home buyers and sellers go away on holiday.
But this year, home movers put more properties on the market and agreed more sales than in any month for over ten years — worth a record total of over £37bn ($48bn).
The mini-boom is leading to monthly price increases in ten out of twelve regions, with a record high in new seller asking prices in seven of those regions.
At this time of year, there is usually a fall in home prices, as sellers try to lure holiday distracted buyers, with the national average monthly fall for the last ten years being 1.2%.
While the data showed a slight monthly fall of 0.2% or £768, but London pulled down the national asking price trend, with the average price tag on a home there falling by 2% month on month.
In July last year, £25 billion-worth of sales were agreed.
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Rightmove director and housing market analyst, Miles Shipside, said: “Not only are we seeing an unusually busy summer period, but also parts of the lending and legal sectors are having to cope with capacity constraints, as some staff will still be on furlough while many will still be working from home.”
Shipside called for patience, especially as some lenders could limit their product ranges due to capacity constraints in their ability to process mortgages and warned home buyers to “plan ahead” in order to minimise the risk of missing the stamp duty deadline on 31 March.
The busy pace of the market could “continue in the short term,” but Shipside cautioned “mindfulness of the wider economic concerns as the year continues”, although the market has proven resilient since reopening.
The number of monthly sales agreed is at its highest level in a decade since Rightmove started tracking this figure, up by 38% on the previous year, and 20% higher than the previous record set in March 2017.
The company said that the increase in activity is not just a result of the stamp duty holiday, as sales agreed are up across all sectors of the market. Figures are up by 29% in the first-time buyer sector, 38% in the second stepper sector and 59% for larger, top of the ladder homes.
But momentum is still building as with the number of weekly sales agreed up by 60%, compared to the same week a year ago.
Overall there were 44% more properties coming to the market compared to the same period a year ago, though Rightmove takes into account considerable regional variations.
Dominic Murphy, managing director of DM & Co. Estate Agents in Solihull, added: “We’re seeing increased activity across all price brackets and expect this to continue well into Q4 as buyers will be doing all that is in their power to push sales through before the end of the stamp duty holiday.
“I suspect that the market will remain buoyant until job losses filter through and really start to hit the market in full force and mortgage-ability starts to be questioned. If you can be in a chain-free position, you are most likely to be taking advantage of the momentum that the market is seeing and not be open to chains breaking further down the line.”
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Before lockdown, the average time between agreeing a sale and moving was around three-months, with the number of sales agreed now being at a ten-year high. But record levels of pent-up and new buyer demand mean that there is extra pressure on the lending and legal areas of the home moving process, Rightmove said.
The company warned mortgage lenders and conveyancers may struggle to cope with the increased workload, as “pressure rises” further in the run up to stamp duty holiday deadline.
Managing director of residential sales at Leaders Romans Group (LRG), Kevin Shaw, said: “This is positive news for both the property sector, and the wider economy.
“The market performed well in Q1 this year, and has picked up since lockdown restrictions were lifted. Pent-up buying demand is a key factor for this post-lockdown emergence, as is the increased demand for living space and gardens,” he continued.
“As many of us continue to work from home, people have realised business can function well while doing so, and so no longer want to commute into big cities five days a week, or live in urban environments closer to offices.”
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