Lockdown relaxation sparks property surge

The easing of the coronavirus lockdown in the UK has led to a surge in the UK property market, according to an analysis by estate agents Knight Frank.

David Sapsted

22 June 2020

Pent-up demand led to the number of new, prospective buyers registering on websites for properties outside London reaching its highest in more than nine years last week, while the number of new instructions to sell outside the capital in the first two weeks of June was 16 per cent higher than the five-year average.

UK house sales: the taps have been turned back firmly on

Ed Rook, head of Knight Frank’s country department, said: “We came out of the blocks flying, but it was all viewings. What’s pleasing to see is that viewings have translated into agreed deals and that has encouraged sellers to act. We are moving towards a more sustainable market.”Meanwhile in London, the number of new prospective buyers was 62 per cent higher than the five-year average while the number of new instructions to sell was 11 per cent higher. Additionally, the number of offers accepted was the third highest figure this year.Sam Sproston, head of the Knight Frank's Wandsworth office, said: “The taps have been turned firmly back on. We have six agreed properties in the last 12 days, including small flats and large houses, and we’ve seen the return of the sealed bid.”Knight Frank, whose analysis included listings on portals such as Rightmove and OnTheMarket, pointed out that activity on the UK property market activity had been severely curbed for eight weeks because of the global pandemic. But now momentum was building after the lifting of restrictions and despite weak economic data and uncertainty surrounding the impact on unemployment.

Unprecedented times for the housing market

The report said the number of offers accepted outside London reached its highest ever figure two weeks ago while, last week, the indications were that the total was even higher.“I’ve never seen a market like this,” said George Bramley from Knight Frank’s country department. “It reminds me of when I worked in London in 2007. This is more than about people looking for a bigger garden. People have had three months to think about life and many have decided to live differently. It will be interesting to see how long it lasts.”However, Andrew Groocock, the company's regional head of sales for the City and East region, sounded a note of caution. “Everything is pointing in the right direction and I am cautiously confident. However, while the economic impact is still unfolding, it feels like a fragile situation and some sellers will need to temper their expectations,” he said.

Reuters' poll predicts 5% drop in house prices

The Reuters' analysis posits that high unemployment due to the coronavirus will sap demand for housing, and thus British house prices will fall 5% this year and will not recover those losses until the end of 2020.However, Marc von Grundherr, Director of Benham and Reeves, responded that, “A 5% fall in house prices over the next six months is highly unlikely given the sharp return in market activity seen over the last few months. Even in the face of a market lockdown and pandemic uncertainty UK house prices have edged up on an annual basis and while month to month movement has shown large declines in places, such a short term measure is far too erratic to base any long term health predictions on."Such a drastic decline would require a catastrophic market collapse and that’s simply not what we’re seeing on the ground and, in fact, we’re seeing quite the opposite."Of course, the explosive tide of demand seen following the reopening of the market will subside to more regular currents of activity as the industry returns to normality. However, we remain a nation of aspirational homeowners and this is yet to be dampened by COVID-19."London, in particular, provides the best gauge of market health and so far we’ve seen the level of asking price achieved remain very robust, buyer enquiries are through the roof and sellers are looking to sell with agents that can facilitate this safely and professionally in the current landscape.Should this level of buoyancy remain over what has been the toughest few months since the financial crash, it will be very unlikely that anything other than positive price trends will prevail for the rest of this year and heading into next year as well."