The latest Zoopla House Price Index (published 27 August 2020) indicates that housing market activity is at its strongest in five years, as buyers shrug off recession fears.
Driven by pent-up demand and a ‘once-in-a-lifetime’ re-evaluation of what buyers want from a home in the wake of lockdown, the number of new sales agreed in August on Zoopla ran 76% ahead of the five-year average.
Buyer appetite since the start of 2020 is now 34% higher than the same eight months in 2019 and, despite the summer holidays, it remains unseasonably strong.
More homes are coming onto the market too, with the flow of new supply over the last month 50% up on the same time last year. And while the supply of new homes for sale remains below last year’s volumes, the gap is closing steadily.
Zoopla also discovered that the bounce in activity has led to homes selling at a faster rate than before the pandemic across all regions of the UK.
Last year the average time to sell a home was 39 days, this has now reduced to 27 days on average, which bodes well for buyers looking to take advantage of the stamp duty holiday
Lockdown has also influenced the types of properties that are selling too, and houses are now changing hands faster than flats as buyers prioritise more space.Lockdown has influenced the types of properties that are selling and houses are now changing hands faster than flats as buyers prioritise more space, according to @zoopla Click To Tweet
Three-bedroom houses (where the supply-demand imbalance is most pronounced) are selling the fastest at an average of just 24 days to sell since lockdown lifted. Flats are now taking the longest time to sell, at an average of 32 days.
As buyers move away from the more expensive urban areas, four and five-bedroom houses are selling 33% faster than in 2019, with buyers concentrating on locations where their budgets will stretch further.
In fact, four-bedroom houses are now selling faster than the average flat.
“The ‘once-in-a-lifetime’ re-evaluation of housing requirements on the back of the lockdown will be a counterweight to the impact of the recession on housing market activity over the rest of 2020.Richard Donnell, research and insight director, Zoopla
Donnell expects the current momentum in market activity to continue into the last three months of the year, and house prices at the end of the year to be 2-3% higher than at the start.
Click to access the Zoopla House Price Index for July 2020