Demand for housing soars by 88% as market reopens

Initial figures suggest buyer demand higher than at start of lockdown, says Zoopla

Housing demand has risen by 88% in England following the reopening of the property market in May. This is according to our latest monthly UK Cities House Price Index Report.

This idicates that buyer demand has risen above levels seen before the coronavirus lockdown began in March.

The number of property sales agreed is also steadily rising since the market reopened. But it will take sometimeforthesenumbers to rise significantly.

This is because it typically takes two months between a buyer starting their home search and a sale being agreed. It can even take a further three months to complete the transaction.

There has been no increase in housing demand in Scotland, Wales or Northern Ireland. This is because the housing markets in these countries have not yet reopened. Nicola Sturgeon, First Minister of Scotland, has indicated that the Scottish housing market could reopen from 18 June.

The POST-COVID bounce may be due to the time people have been spending in their homes.

Richarddonnell,director of research and insight at Zoopla, says:

“The COVID crisis and 50 day lockdown has created an unexpected one-off boost to housing demand.

“Millions of UK households have spent a considerable amount of time in their homes over the lockdown period and missed out on hours of commuting.

Many households are likely to have re-evaluated what they want from their home. This could well explain the scale of the demand returning to the market.”

Two English coastal cities have seen the largest spike in demand after the market opened, compared to levels in February.

Demand in Portsmouth and Southampton is more than 40% higher than precoronavirus levels. Demand has also risen strongly in Newcastle, Oxford and Leeds.

There was no change in average house prices since March across the 20 cities included in Zoopla’s Cities Index Report.

This indicates that buyer demand has risen above levels seen before the coronavirus lockdown began in March.

This marks the lowest monthly rise since January 2019.

On an annual basis (the change in prices since April last year), prices were up by 1.9%.

The annual change in house prices dipped from 2% in March to 1.9% in April.

Nottingham continues to lead the way in terms of house price growth, with average prices up by 4.1% in May.

This is closely followed by Leicester, with prices up by 4% in May.

Average prices dipped in Oxford (-0.8%) and in Aberdeen (-1.7%).

The extension of the mortgage payment holiday offers further support for homeowners struggling financially.

This struggle may come from having been placed on furlough. Or because homeowners are facing employment uncertainty.

Zoopla expects the slow rate of growth to become more marked over the summer.

But a clearer picture will emerge when we see more sales complete.