The UK may be in recession but this isn’t affecting the housing market, which is performing at its strongest for five years, according to a new report.
Property portal Zoopla says demand continues to run ahead of supply, sustaining annual house price growth at +2.5%.
While the market sets new highs, buyer interest has softened in the past month following the post-lockdown surge, but demand remains 78% above last year. The rest of 2020 is expected to remain strong with house prices up 2-3% by the year-end.
Richard Donnell, research and insight director at Zoopla, said: “Housing market conditions remain unseasonably strong despite the UK moving into recession. Demand continues to outpace supply and support house price growth of 2.5% per annum.
“The next important milestone for the housing market comes in September when schools reopen and the UK starts to get back towards a full reopening of the economy. The ‘once in a lifetime’ re-evaluation of housing requirements on the back of the lockdown will be a counterweight to the impact of the recession on housing market activity over the rest of 2020.
“While demand has softened over August, we expect the current momentum in market activity to continue into 2020 Q4.”
Since the market reopened after lockdown properties are also selling quicker. The time to sell has decreased by 31% across the UK, averaging just 27 days in the period since lockdown, compared to 39 days over the same period in 2019.
Zoopla says three-bedroom houses are the fastest-selling property on the market with an average selling time of 24 days since the lockdown was lifted.
With buyers wanting more space and moving away from cities and towns this means four and five-bed houses are selling 33% faster than in 2019. One-bedroom flats are taking the longest time to sell at an average of 34 days – although this still remains quick.
Donnell added: “Houses are selling faster than flats as we see a shift in buyer priorities in the wake of the lockdown and movers prioritise more space.”
Zoopla’s July House Price Index has found that 16 of the 20 cities covered by the index are recording a price growth of 2% or more.
Average property prices in Manchester have risen by 4% to £174,100 in the last year, the Daily Mail reports, while in Nottingham there’s been a 4.4% increase with average prices at £158,500.
The average price of homes in Leeds, Liverpool, Edinburgh and Leicester have risen by 3% or more and in London there’s been a 2.1% increase, an average of £475,100.