How is the property market coping with the third lockdown?

We’re now well into the third national lockdown and as the nation’s thoughts start to focus on how and when we’ll be exiting, it’s interesting to look back over these last few weeks to see how the property market has coped.

Many homeowners are still using this time to review their location and home, and many are choosing to plan moves for this year. More people than ever seemed to use the New Year period as a chance to plan their house move as, according to recent data, there has been a 21% increase in demand since the start of this year. So it’s clear to see that the lockdown isn’t stopping those wanting to move.

Data from Zoopla also showed that buyer demand jumped 13% year-on-year in just the first few weeks of 2021 alone. The increased buyer demand has certainly been seen in the property market as, according to the latest UK House Price Index, there was an 8.5% annual increase in property prices too.

The stamp duty holiday has naturally helped to keep the property market moving, as in December and January nearly 130,000 transactions were recorded. December 2020’s figures were significantly higher than December 2019 at a 31.5% increase, and there was also a monthly increase from November to December of 13%.

Therefore, it’ll be really interesting to see if the stamp duty holiday will be extended, and to see how month to month figures compare during the upcoming spring months.

There’s positive news coming in about building activity, too, as although the number of new homes registered in 2020 was 23% lower than in 2019, activity rebounded in the final quarter which was 34% up on quarter three.

We’re expecting to see the positive trend continue for new builds and developments across 2021 as the construction industry is now largely unaffected by the lockdowns.

There is also good news for those needing a mortgage as over 100,000 mortgages were approved in December last year, which is over 50% higher than in December 2019.

The great news for buyers is that the number of deals available for people with a 10% deposit has now increased to around 160 deals. This is up from a low of 51 in October last year, but still significantly below the 762 that were available in January 2020. The availability of mortgages is a huge contributor to buyer demand as well.

The lettings market is also seeing similar trends as average rental values across the UK rose by 1.3% in the year to January 2021, and although this is the smallest annual increase since October 2019, it is still positive news considering what we were predicting back in April 2020.

With a global pandemic and high levels of uncertainty around the economy in the UK and across the world, it’s quite surprising to see all the positive figures coming out of the property market. It’s no surprise that those I speak to outside of the industry, and customers, are often surprised at the activity levels and resilient trends in the market.

Looking forward, I truly expect to see these trends continue and the supply of homes for sale to also increase sharply once the lockdown starts to ease and of course the vaccinations are rolled out even further during spring and summer. However, as with everything, only time will tell.

*Ellie Donaghy is Head of Lettings at Andrews Property Group