Many in the industry have been forced to slow down, housing market analysts are still busy scrutinising data while forecasting what the future may hold. The past week has brought a crop of reports covering the impact of the coronavirus crisis on sales, lettings and development.
Zoopla’s UK Cities Index reports that there are now 373,000 property transactions with a total value of £82bn on hold across the UK due to coronavirus restrictions. The impact on estate agency revenue is immense and amounts to a backlog of £1bn.
The majority of the sales were agreed between November 2019 and February 2020, and would have been set to complete between April and June this year.
It’s not surprising to hear that new sales agreed are 90 per cent down on levels recorded in early March when the housing market had picked up and looked set for a bumper spring.
Zoopla says that the outlook for progressing home sales 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. It predicts that the number of completed sales in the UK will be down by 50 per cent this year, with volumes expected to remain low until September.
The major cities index, which includes Leeds and Sheffield, shows that Cardiff registered the largest drop in buyer demand as a result of the pandemic. It saw an 80 per cent decline from the end of March to the week ending April 5. Newcastle had the smallest fall at just 48 per cent.
However, demand has rebounded, most notably in Leeds, Manchester and Liverpool, and Zoopla predicts that the post lockdown bounce back will be faster in these Northern cities.
Average house price growth year-on-year in Britain’s key cities was 1.8 per cent. Leeds outperformed this with year-on-year growth of 3.1 per cent, as did Sheffield with a 2.4 per cent rise between March 2019 and March 2020. In common with all areas, price growth in UK cities slowed to an average 0.1 per cent in March this year.
Zoopla’s Research and Insight Director Richard Donnell says: “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 .
“Many households have spent more time at home in the last few weeks and some may feel the urge to move. This could boost activity in the second half of 2020 but this all depends upon how much the economy is impacted over the rest of the year and the impact on levels of unemployment.
“It is too early to register any pricing impact. Demand is rising but there is a long way to go until we see a return to typical levels of activity.”
While the numbers of those buying and selling is rock bottom, Zoopla figures show the number of those viewing property for sale online is only down by 35 per cent compared to pre-crisis levels.
Over at Rightmove, the latest rental report reveals that the average monthly rent in Yorkshire is now £625 per calendar month, up three per cent on this time last year. The portal also shows that online searches for homes with gardens has a hit record high for the year and are almost double the level they were in the first week of lockdown.
Total searches dropped by just over a third as lockdown began and physical viewings were put on hold. However, numbers have recovered and are now only 20 per cent down. Total stock available to rent was up 2.6 per cent in the second two weeks of lockdown compared to the first two weeks.
While all but essential moves are on hold, Rightmove say that some prospective tenants are happy to secure a property on the basis of photographs or video footage and are starting an application and referencing process now so they are ready to move in when possible.
The housing construction sector is showing some signs of revival, according to Knight Frank. Housebuilders Barratt, Bellway and Redrow are set to join Taylor Wimpey and Persimmon in opening some building sites while adhering to social distancing guidelines.
Persimmon has implemented a phased restart to support home buyers who have already made a purchase. Its sales teams are using virtual viewings and a digital reservation process, which has resulted in around 820 private sales reservations secured in the five weeks up to April 19.
A shortage of building materials has been an issue but brickmakers Michelmersh and Ibstock are resuming production. Housing Secretary Robert Jenrick says: “Construction can and should continue so long as social distancing guidelines are followed to protect workers.”