The summer holiday months are traditionally among the quietest for the housing market, but 2020 has been far from typical and estate agents have been run off their feet with instructions, viewings and the effort involved in pushing sales through. The boom that started to build when the market was allowed to reopen in mid-May is still in full swing but the question on everyone’s lips is “how long will it last?”.
Patrick McCutcheon, head of residential at Dacre, Son and Hartley estate agents, says: “There is no reason why the market should not perpetuate. There is a good balance between supply and demand. We haven’t got too much stock and there is fresh stock coming on at a steady rate. When you add the fact that interest rates are at an all-time low, along with the Stamp Duty holiday then there are a lot of positives.”
He expects a flurry of activity in January and February as buyers and sellers aim to secure deals and push them through before the end of the Stamp Duty relief, which is set to end on March 31. “It’s a little too early to say what will happen in Spring but it has the potential to be bouncy.”
Simon Blyth, of Simon Blyth estate agents, agrees and reports that activity in his branches across west and south Yorkshire, is high. “Viewings in August were up 100 per cent on last year and the number of people registering on our mailing list was up 150 per cent, which is astonishing. Supply is good and demand is better.
"Given those figures and the strength of the market at the moment, I don’t believe there will be a major cooling off. Yes, we will have winter, Brexit and the virus to contend with but lockdown has made people think about what they really want and they are being very clear when making decisions about moving. They are saying ‘Let’s get on with it. Life is for living’. I think the market will be busy at the start of the year due to the Stamp Duty holiday and then will be into Spring when the market traditionally picks up.”
For those aiming to take advantage of no Stamp Duty on properties up to £500,000, Simon warns of a potential bottleneck for transactions at the beginning of 2021 as buyers race to beat the March 31 end date. “My message is that if you want to move, then put the wheels in motion this year. It could be pandemonium in January and February and I’m not sure solicitors will be able to cope.”
Savills, which operates solely at the top end of the market, also believes the post-lockdown rebound looks set to maintain momentum beyond the summer. Tanya Coffey, associate director of residential sales at Savills, York, says: “There has been a particularly strong rebound, underpinned by equity. Those with the financial security to be able to move are acting on their changing priorities, their requirement for more space and, in many cases, a reassessment of their work-life balance.”
Savills say agreed sales have been substantially boosted by activity in villages due to strong demand from those who want the benefit of rural living within striking distance of a well-serviced town or city.
Sales subject to contract for properties worth £1m or more have doubled and reports of competitive bidding is widespread but Tanya Coffey adds that buyers are keeping their feet on the ground in terms of what they are willing to pay in the current economic climate. “Keeping buyer and seller expectations on pricing aligned will be key to maintaining the summer momentum through the autumn and beyond,” she says.
“The economic backdrop and the close of the furlough scheme at the end October means short term price expectations remain cautious, though buyers are willing to take a longer term view on pricing. That is underpinning activity across the prime markets.”
Looking ahead from now to Spring next year, Simon Blyth says: “I don’t think prices will fall but rises won’t be spectacular.”
The latest Halifax house price index saw average UK growth increase by 5.2 per cent between August 2019 and August 2020 but Russell Galley, managing director, Halifax, is more circumspect about the future and says he expects greater downward pressure on house prices in the medium-term.
For those fearing the worst, Tom Bill, Knight Frank’s Head of UK Residential Research adds: “While unemployment will rise and some form of second wave of Covid-19 will occur, our central scenario remains that double-digit price falls will not take place.
“Other factors will keep upwards pressure on prices. Political uncertainty and an ever-shifting tax landscape have kept house price inflation in check in recent years, widening the scope for prices to rise. Furthermore, ultra-low interest rates will limit the type of forced selling that pushed prices down following the global financial crisis. In short, this does not feel like a rerun of 2008/09 for the UK property market.”
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