Demand and sales agreed both soaring - but may not last, warns Zoopla

There’s been a strong rebound in demand for homes and an “unprecedented” bounce in new sales agreed according to Zoopla.

The portal defines demand as being individuals in some form of active engagement looking for a property - that includes enquiries with agents, and is more than merely online browsing.

An analysis of this demand by Zoopla up to Sunday June 7 shows that demand is now 54 per cent higher than at the start of March, as pent-up demand returns to the property market, with many people coming to the market who had not expressed an interest in moving before the Coronavirus outbreak.

New sales agreed have rebounded and are just 12 per cent short of the levels seen in early March as buyers return to the market and agree to new purchases; Zoopla has seen the number of new sales agreed rise by 137 per cent since the market reopened.

The higher the price band, the greater the increase in the volume of sales agreed compared to pre-COVID; nationally, £1m home sales are 16 per cent higher than in early March although they account for just three per cent of overall sales agreed in the week to June 7.

Sales are higher across all price bands nationally but demand for housing has increased at a higher rate for higher value homes as homeowners look at trading up for more space or moving to a better location.

And the average asking price of homes being marked as sold subject to contract on Zoopla in the last week is six per cent higher than a year ago. The annual growth asking prices for agreed sales are picking up where they left off pre COVID having fallen slightly over the lockdown.

“The rebound in housing demand over the last month is not solely explained by a return of pent-up demand. COVID has brought a whole new group of would-be buyers into the housing market. Activity has grown across all pricing levels, but the higher the value of a home, the greater the increase in supply and sales as people look to trade up” explains Richard Donnell, the portal’s director of research and insight.

“Higher asking prices for newly agreed sales means that house price indices may not register immediate price falls. Lower asking prices for homes sold over the lockdown period may drag down indices over May, but this new data suggests house price growth is set to remain positive in the next two months” he adds.

But he cautions: “We still believe that this spike in demand will be short-lived as the economic impacts of COVID start to feed through into market sentiment and levels of market activity in 2020 H2.”