Buying a house: millions of home buyers resume property search as market springs back from lockdown
Home buyer appetite is expected to sustain stability in the housing market.
Millions of home buyers and renters across England resumed their property search within hours of the Government’s surprise relaxation of the coronavirus lockdown imposed on the housing market on March 23.
Property portal Rightmove reported 5.2 million visits to its listings on Wednesday May 13, a four per cent increase compared to the same day a year ago.
The number of buyers who called or emailed an estate agent after seeing a listing on Rightmove doubled on Wednesday compared to the day before and was just 10 per cent behind the same day a year ago.
Rental demand also surged, with Rightmove recording the highest number of enquiries in one day since September last year.
As property viewings in person started again in London — with strict social distancing guidelines in place — estate agents reported “phones ringing off the hook”, record numbers of enquiries and a huge spike in instructions and valuations.
Miles Shipside, Rightmove director and housing market analyst said: “The traditionally busy spring market was curtailed by lockdown, but we’re now seeing clear signs of returning momentum.”
The market remains closed in Wales, Scotland and Northern Ireland.
How long will it take for the market to recover?
Despite the flurry of activity, for the second month running Rightmove was unable to produce its report on trends in asking prices, as the volume of newly marketed properties within the past four weeks remains too low.
The number of homes coming to market is down 90 per cent on the same period a year ago. But with a week-on-week increase of 111 per cent on the day the market reopened, a growing number of newly marketed properties should start to trickle through.
Most homes that were for sale before the Covid-19 pandemic remain as active listings. In Greater London about 49,000 homes are currently listed for sale, with 56,800 for rent.
Miles Shipside said: “We expect consistent momentum to rebuild over several months rather than weeks. With no new seller asking price data it’s too early to comment on price movements, though high demand is needed to support a stable market.
“If there are attractive lower-deposit mortgages available, it would help sustain the recovery in activity. The industry has been caught by surprise, as we were all expecting the market to stay closed until at least June.”
The lockdown effect on home moves
Lockdown left 450,000 buyers and renters stranded mid-transaction, unable to push on with home moves worth an estimated £80 billion.
James Clarke, head of London sales at Knight Frank, said last month that most deals already under way when the crisis began were continuing. He estimates that 80 per cent of pre-lockdown deals remain on track. “Some sales are falling through, but you’d expect that in a normal market,” he adds.
Many people working from home during almost eight weeks of lockdown are seriously re-evaluating their situation.
Rightmove said the number of Londoners searching for rental homes with gardens skyrocketed by 101 per cent in a week. A survey by Savills indicated 30 per cent of Londoners are now more likely to consider a village or countryside location for their next move.
Miles Shipside noted “the existing desire to move now being supplemented by some people’s unhappiness with their lockdown home and surroundings”.
What does the housing market reopening mean for prices?
Knight Frank has downgraded its forecast of UK house prices for the year ahead, from a three per cent dip to a fall of seven per cent compared to last year, despite the market’s unexpected resumption. Much of this decline has already taken place during lockdown.
The forecast is based on discounts demanded by buyers when they make an offer.
Many other forecasters and agents say it is just too early to tell what will happen to house prices yet.
What is the ‘new normal’ for home viewings?
Buyers, sellers and agents are adapting to a seismic shift in the way property is marketed and viewed, by adhering to the Government’s strict guidelines on home moving during the Covid-19 pandemic.
Virtual viewings are encouraged in the first instance, as the number of physical viewings allowed per day is restricted.
Estate agents, who are required to wear masks and gloves, are sanitising doors and switches before and after viewings, while homeowners must vacate the property while viewings take place.