UK housing market at decade high after COVID-19 bounce back
The UK housing market had its busiest month for a decade in July as the value of property sales reached a record £37 billion, according to Rightmove.
Agreed property sales increased by 48 per cent compared with the same month in 2019 and were 20 per cent higher than the previous record noted by Rightmove’s monthly survey in March 2017. The momentum in the market has continued this month, with the latest weekly figure revealing a 60 per cent hike in sales.
Rightmove said that the £37bn of agreed sales that it had recorded was the highest since it started tracking the data a decade ago. Its report is the latest evidence of bounce back in the UK housing market since the coronavirus lockdown measures were eased and Rishi Sunak reduced stamp duty by raising the threshold at which buyers start to pay the tax to £500,000.
Pent up demand for property is driving the soar in housing market activity, the stamp duty cut and people rethinking where they want to live because of the nature of life under lockdown and the possibility of working from home more regularly.
However, while Rightmove and other reports have suggested that the market is enjoying a rebound, economists fear that it could come to a swift end by a rise in unemployment and further economic slowdown when government support schemes come to an end.
Furthermore, the housing market could be hit with a wave of home repossessions once banks end the mortgage holidays that they have offered during the pandemic, The Times reports.
The stamp duty holiday is also due to end at the end of March 2021. Banks across the UK are also anticipating a decline in house prices with their recent financial results revealing various plans put in place to account for losses stemming from this. Metro Bank said it expected prices to drop by 14.6 per cent.
Rightmove said that the average asking price on a property in the UK was now £319,497, slightly lower than the record high of £320,265 in its July report.
The mass city exodus has helped to push prices to record levels in Devon and Cornwall, but prices in London have fallen by 2 per cent month-on-month, with some landlords opting to put their city flats on the market in the wake of a slump in the number of tourists and students.
Nevertheless, the 0.2 per cent monthly drop in prices is lower than the average of 1.2 per cent usually recorded at this time of year as activity slows in the market.
Miles Shipside, Rightmove director and housing market analyst, said: “There have been many changes as a result of the unprecedented pandemic and these include a rewriting of the previously predictable seasonal rulebook for housing market activity and prices. Home movers are both marketing and buying more property than we have recorded in any previous month for over ten years, helping to push prices to their highest ever level in seven regions.”