Even as we’ve entered Lockdown 2, which is set to last until December 2 and aims to drive down the incidence of Covid-19 and the number of deaths from the disease, the property market is remaining open.
The government has confirmed people can still buy, sell and move homes, as long as they adhere to all the necessary public health advice surrounding coronavirus.
This means, of course, that the property boom which has been sustained since the release of the first lockdown will be able to continue up to Christmas and beyond.
Conditions remain positive for both buyers and sellers, with Zoopla’s recent House Price Index finding that there are currently 140,000 more home buyers waiting to complete on their properties right now in comparison to this time last year.
That suggests a very buoyant market, despite the challenges and potential obstacles posed by Covid. The stamp duty holiday, low interest rates and a competitive mortgage market are all helping to drive demand, as are people’s changing priorities – with more space, a garden, a home office and a move away from bustling cities to smaller towns all high on the agenda.
Here, we take a closer look at the Zoopla report and why a high number of buyers in the market is good news for sellers.
Record high sales agreed post-lockdown means there are currently 50% more homes progressing through the sales system than this time last year, as many buyers rush to meet the stamp duty holiday deadline on March 31 2021.
The portal estimates that there are currently 418,000 sales in the pipeline which are yet to complete, with these sales worth a collective £112 billion.
In August 2020, sales agreed hit an annual high, peaking at a 62% year-on-year uplift. Sales agreed in October 2020 were running at a 53% year-on-year uplift in comparison to October 2019.
Sales agreed in the year to date are up most in the South East, London and the East, up 15%, 12% and 11% respectively.
Zoopla said that those hoping to enter the market early next year to beat the stamp duty deadline should be aware that just a quarter of sales will complete by March 31 in a normal year – and, of course, early 2021 will still be far from a normal year.
The website advises those keen to beat the stamp duty deadline in March to have a sale agreed before Christmas, which means they will need to act around now if they want to avoid missing out.
Zoopla has created a timeline which reflects the probability of an agreed sale completing by the SDLT deadline, which can be seen below. While nearly all sales agreed in October, November and December will normally get over the line by the end of March, this starts to fall considerably as we enter the new year and becomes very unlikely and then highly unlikely in February and March respectively.
Of course, this doesn’t account for the impact of the second national lockdown and the current delays and backlogs in the system – which conveyancers are struggling to cope with. This is likely to mean transactions take longer than normal to complete.
Figure 1: The percentage of agreed sales that will complete by 31st March 2021
Source: Zoopla Research
As Richard Donnell, research and insight director at Zoopla, says: “There is a sizable pipeline of business for the property, lending and conveyancing industry to convert into completed sales before Christmas and into Q1 2021.”
“Those who leave it to January to start their search for a home will be cutting it fine - just half of sales agreed in January will convert into a completed sale by the end of March so those looking to beat the stamp duty deadline will need to be well-prepared. Finding an agent before Christmas and instructing a conveyancer to prepare all the seller’s legal information will be essential to boosting the chances of saving up to £15,000.”
The regional breakdown of the report revealed that new homes coming to the market have increased in all housing markets across the UK, with London seeing the greatest increase in new supply - up 39% compared to this time last year. The British average for new supply is up 18% year-on-year.
Price growth is picking up across nearly all cities, with every English city registering house price growth in September 2020.
Although transactions are taking just over 100 days from sales agreed to completion at present, the sheer volume of new business means this could increase in the short-term.
The Zoopla research also found that greater demand from buyers is bringing more supply into the market, with the number of homes for sale up 18% on last year, and commanding higher average asking prices. The median price of a home listed for sale on Zoopla in October was 10% higher than October last year.
The strength of demand is proving a boon to sellers, pushing prices up by 3% over the last 12 months compared to +1.1% last year.
However, sales activity is becoming more polarised, with a recent fall in sales in less wealthy demographics that are reliant on higher loan-to-value (LTV) mortgages, and increasing sales in wealthier areas that are less-mortgage reliant and have more property equity.
The ongoing recession and rising unemployed caused by Covid is also, unsurprisingly, impacting parts of the market. This, though, is being masked by the strength of market activity over the summer.
Zoopla says this polarisation is set to become more apparent by mid-2021, after the post-lockdown rush has worked its way through the system.
The rush to beat the stamp duty deadline and other factors boosting buying demand make now an ideal time to sell. The above research shows just how strong the buyer market currently is, and how many sellers are able to get more than their asking price for their home at present.
The second national lockdown might also help to focus the minds of buyers further, as they spend more time at home and re-evaluate their life plans.
The need to act quickly to take advantage of the stamp duty holiday is laid out starkly in the graph above, and this should help to ensure that sellers have a pool of highly motivated buyers. With Christmas likely to be a highly different affair this year, there may not be the usual desperate rush to complete before the big day, as it’s likely the mixing of families will be limited and big gatherings will be off the table.
Still, if possible, many buyers like to be in their new abodes and settled before the festivities roll around.
There is plenty for sellers to be optimistic about, but here at Balgores Property Group we can help you to get your sale over the line while following all the latest Covid advice – and for the best possible price.
For further guidance on any part of the moving process, get in touch with our expert team today. You can also kickstart your property sale with a free and instant online valuation to see how much your property could be worth on the current market.