{"id":6031678,"date":"2020-05-28T09:40:39","date_gmt":"2020-05-28T08:40:39","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=6031678"},"modified":"2023-11-06T15:21:19","modified_gmt":"2023-11-06T14:21:19","slug":"uk-house-prices-and-buyer-demand-the-uks-response-to-covid-19","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2020\/05\/28\/uk-house-prices-and-buyer-demand-the-uks-response-to-covid-19\/","title":{"rendered":"UK house prices and buyer demand: the UK’s response to COVID-19"},"content":{"rendered":"

A level of confidence and optimism is beginning to return to the UK housing market. Zoopla’s latest Cities Index Report looks at how things are changing in the wake of COVID-19.<\/strong><\/p>\n

The UK property market saw a surge in activity from buyers, sellers and in the private rented sector<\/a> in May. As lockdown rules began to ease and the housing market<\/a> was “reopened”, much of the pent-up demand from recent months was released across the sector.<\/p>\n

In the week after the government’s housing market announcement, buyer demand rose by 88%. While the spike also represented how low the market had fallen since March, Zoopla expects this trend to continue although at a steadier pace over time.<\/p>\n

According to the report, the north of England saw a huge revival in demand, as did some coastal areas. This is counterbalanced by a much smaller rebound in London property demand. Zoopla’s data suggests this “could reflect a portion of new demand looking outside the city” as a result of lifestyle changes after COVID-19.<\/p>\n

“[This] could be a result of the lockdown and people wanting to trade out into commuter towns, but it will also be a function of affordability,” the report adds.<\/p><\/blockquote>\n

Little movement on house prices<\/h4>\n

Year-on-year house price<\/a> rises continue to be highest in cities in the north and the Midlands. Between April 2019 and April 2020, the average UK house price increase was 2.4%, or 1.9% across Zoopla’s top 20 cities. This is only down slightly from 2% in March, although it could decline slightly more over the coming months.<\/p>\n

Nottingham made the most gains in the year to April, with average house prices rising by 4.1%. Next on the list were Leicester (4%), Manchester<\/a> (3.8%), Leeds<\/a> (3.1%), Edinburgh (2.9%), Liverpool<\/a> (2.7%) and Birmingham<\/a> (2.5%).<\/p>\n

Zoopla predicts that in the second half of the year, the five-year average growth rates could slow down further. However, much of what happens with house prices will depend on transaction levels.<\/p>\n

The report says: “Despite the uncertain outlook, we believe that pricing levels for deals agreed pre-lockdown will resume close to where they left off in early March. Government support for the economy sends an important message for now.<\/p>\n

“Some buyers may try to renegotiate and push for discounts, which could put downward pressure on prices. Sellers may accept some movement on pricing, but this will need to flow up and down the chain putting sales at risk.”<\/p><\/blockquote>\n

Home movers pushing ahead<\/h4>\n

In a consumer survey, the property platform found that around 60% of people plan to go ahead with moves<\/a> despite the COVID-19 impact. The report also showed that more than a fifth of buyers or movers (22%) hadn’t been directly affected by the outbreak.<\/p>\n

The remainder of people, who said that their search was on hold, cited a variety of reasons for this. While some wanted to wait until there was more certainty, others had concerns around house price falls. Confidence over future finances was also an issue for some.<\/p>\n

It is expected that, as the situation continues to unfold, the market will see more certainty return. Those who had put plans on hold may be looking to press ahead now, while others are hoping to in the coming months. Many property investors<\/a> looking at UK real estate have either continued with their investments, or are set to do so in the very near future to take advantage of low interest rates and the low sterling.<\/p>\n

Mortgage market changes are key<\/h4>\n

In the immediate aftermath of the lockdown, many mortgage lenders contracted their offerings significantly. However, as restrictions have been relaxed, the mortgage market<\/a> has begun to return to normal. Further to this, many lenders have now adopted more digital<\/a> processes.<\/p>\n

One of the major changes was the limits placed on LTVs to reduce risk for lenders. Many began only offering loans up to 60% LTV, with others only offering low-risk remortgages. Many borrowers have also taken payment holidays<\/a> as part of the government’s aid package, which has also affected some lenders.<\/p>\n

Now, product availability is much higher and continues to rise. This applies to both the homeowner and the buy-to-let sides of the market. More lenders are offering higher LTV products, and landlords once again have a large range of choice.<\/p>\n

However, the report warns: “Committed first-time buyers may need to find more equity to put into purchases, or step back from the market. Many may look to the Help to Buy scheme to buy a new home using a 10% deposit.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

A level of confidence and optimism is beginning to return to the UK housing market. Zoopla’s latest Cities Index Report looks at how things are changing in the wake of COVID-19. The UK property market saw a surge in activity from buyers, sellers and in the private rented sector in May. As lockdown rules began… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":6031688,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[6],"tags":[24,47,33],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6031678"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6031678"}],"version-history":[{"count":1,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6031678\/revisions"}],"predecessor-version":[{"id":6094189,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6031678\/revisions\/6094189"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6031688"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6031678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6031678"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6031678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}