Brits have turned to home-buying to fill the summer holiday void post-lockdown as the UK housing market’s “mini-boom” accelerated in August.
Rightmove’s latest house price index released today reveals the highest number of monthly sales in more than 10 years in August. It is up by 20 per cent on the previous high, and with a record total value of over £37bn.
There is usually a seasonal slowdown in UK housing market activity over summer, as buyers and sellers focus on summer holidays.
But given the current coronavirus restrictions, movers are placing more property on the market and have agreed more sales than in over a decade.
The latest figures also show the highest number of UK properties coming to the housing market in a month since March 2008.
House prices also usually fall in this period but there have been monthly price increases in 10 out of 12 regions, with a record high in new seller asking prices in seven of the regions.
London house prices dent UK housing market ‘mini-boom’
However, London dragged down the national average to a 0.2 per cent decline due to its more typical two per cent seasonal monthly fall.
Evidence of a “mini-boom” first emerged in July’s figures, which showed the average asking price of property coming to market was up 2.4 per cent compared to March, before lockdown measures were announced.
The government reopened the UK housing market on 13 May after lockdown, and has since announced a stamp duty holiday to reignite the housing market.
Rightmove housing market analyst Miles Shipside said: “Rather than just a release of existing pent-up demand due to the suspension of the housing market during lockdown, there’s an added layer of additional demand due to people’s changed housing priorities after the experience of lockdown.
“This is also keeping up the momentum of the unexpected mini-boom, which is now going longer and faster.”
Additionally the figures show the increase in activity is not just a result of the stamp duty holiday. Instead, sales agreed are up across all sectors of the market. In the first-time buyer sector they are up 29 per cent, 38 per cent in the second stepper sector and 59 per cent for larger homes.
Russell Quirk, property expert at MovingHomeAdvice.com, said: “This explosion of activity is not just a consequence of the fuel of stamp-duty-respite but a market that has proven time and again that it is robust even in the most challenging of circumstances.
“You can apparently throw Brexit, political turmoil, a couple of general elections and a once in a century pandemic at it yet it still marches on. Like the proverbial cockroach, no matter what you do to kill it, it simply will not die.”
More stimulus to come?
Tomer Aboody, director of property lender MT Finance, said the summer shift in housebuyers’ attitudes is no surprise with popular holiday destinations subject to UK quarantine rules.
“The vast majority are staying in the UK and getting on with buying and selling,” he said.
“This buoyant surge in sales and properties coming to market underlines the shift in priorities in terms of buyers’ attitude to moving and their requirements.
“Outside London, the housing market has been busy with workers looking for commuter belt homes which are cheaper than the capital but also bigger for working from home and with outside space for the children.
Aboody said the stamp duty cut does not benefit London buyers nearly as much, with the new threshold set at £500,000.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added that pent-up demand over lockdown is adding the UK housing market’s bounce back.
“Despite some suggestions the momentum may fizzle out, there is not yet any sign of bad economic news raining on the parade,” he added.
“On the contrary, a more broad-based sustainable recovery may be underway with increased activity in most price ranges. If anything, the market is more likely to be restrained by lender delays in mortgage underwriting than a drop in buyer enthusiasm.”