The property market is booming - but can it last?
Property market pundits were predicting a ?lockdown lift? as estate agents opened their doors again in May. So were they right? A month on and the figures seem to be proving the point - so far. According to Show House, the property market is ?roaring back with an unprecedented level of new sales agreed and prices holding firm?.
Good news then. Although some markets, including London, are reported to be seeing a slight softening. Buyers are now rethinking commuting in the wake of the pandemic and there is a resurgence in the popularity of homes outside the capital. House prices have taken a hit across the board according to the Halifax but they are still 2.6% higher than this time last year. Brexit uncertainty was damping down the market in 2019. The early 2020 ?Boris bounce? was short-lived but the lockdown lift does now seem to be kicking in.
Online property platform Zoopla reports that enquiries and viewings are 54% higher than at the beginning of March as pent-up demand brings people back into the property market. New sales have ?rebounded? and are up by 137% since the market re-opened.
So what are buyers looking for? Zoopla reports increasing interest in higher value homes as people look for more space. According to the latest RICS Residential Market Report, 81% of agents polled expect to see an increase in demand for homes with gardens and balconies or located near public green spaces. In contrast ? and unsurprisingly, given the ongoing cladding crisis - 78% said they expect to see less interest in homes in high rise residential blocks. This is an unfortunate double whammy for flat owners who are having to jump through a complex series of hoops to bring their homes to the market in the first place.
The housing market is a key driver of the UK economy, so it's little wonder that estate agents were one of the first sectors to be allowed back to work. And after two months with closed doors, nor is it any surprise that the property market came back with a bang in May but will this level of activity continue?
Zoopla thinks the pandemic has created a ?one-off? boost to demand and that the current "spike" will be "short-lived?. So as the full impact of the pandemic on the economy starts to bite, unless they have good reason to move, the lockdown lift may prove to be just a glitch in the property market as people decide to keep their money in the bank for a while longer.
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