How is Coronavirus affecting house prices?
In a year where our homes became our entire world it’s perhaps not entirely surprising that we have seen some great shakes in the property market.
The property market is open and active throughout the UK. Estate agents are conducting in-person house viewings and buyers are able to move home, despite the Covid-19 measures still in place. Since last July, the UK property market has been on the rise, led by the government temporarily cutting stamp duty. The biggest savings of up to £15,000 ended on 30 June, but buyers in England and Northern Ireland can still save up to £2,500 if they buy a home before the end of September.
We’re getting a clearer picture of the impact coronavirus has had on house prices, but the stamp duty holiday and continued uncertainty over what will happen next with the pandemic means figures could continue to fluctuate. The most reliable barometer of house prices is the Land Registry’s UK House Price Index, which is based on sold property prices. It works on a two-month lag, so the latest available figures are for April. The Land Registry says the average price of a property in the UK rose by 8.9% year-on-year in April to reach £250,772, as shown in the graph below.
There’s been a great deal of optimism around the property market of late, with buyers competing over homes in the most sought-after areas. Research by Rightmove found the average time to agree a sale in May was 41 days, the lowest figure registered since the start of the pandemic.
The recent rise in demand from buyers hasn’t been met by a flurry of new properties coming on to the market, and this imbalance could keep prices high in the coming months, even with smaller tax savings on offer. Mark Hayward of the estate agency group Propertymark says: ‘The market is experiencing a growing imbalance of supply and demand, and we see no indication that supply levels will increase. We firmly remain in a strong seller’s market which will impact house prices as buyers bid to secure their dream home. ‘In order to stop a multitude of viewings for a property while restrictions are still in place, agents have been able to revert to the traditional practice of creating a hot-list of able buyers who can act quickly.’