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Housing Industry: #Post-Covid Bounce

Updated: Jul 10

Well, May has certainly been a very busy month on the housing front since the lockdown was lifted on 13 May 2020. Let's take a look through what the key headline makers had to say.


Nationwide


In May's edition of #NationwideHousingIndex, Robert Gardner, Nationwide's Chief Economist, said:

“UK house prices fell by 1.7% over the month in May, after taking account of seasonal effects – this is the largest monthly fall since February 2009. As a result, the annual rate of house price growth slowed to 1.8%, from 3.7% in April.

and:

“However, the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy."

and:

“These same measures should also help ensure the impact on the housing market will ultimately be less than would normally be associated with an economic shock of this magnitude.”

The sentiment of these two last paragraphs have been a repeating theme of these monthly Nationwide reports.


#Nationwide data on the average UK house price over the last 10 years:

Image: Nationwide

The Nationwide report refers to their recent survey, which shows that households are thinking differently about their homes since the pandemic hit - the most significant outcome is that outdoor space has become a number one priority:


Image: Nationwide


Further details on this report are available here.



Rightmove


In their May #HousePriceIndex report, #Rightmove confirmed that first day traffic was up, after the lockdown was lifted. Home-mover visits to Rightmove were back to pre-lockdown levels, with almost 5.2 million visits (up 4% on the same day twelve months ago). Unique enquiries doubled between Tuesday 12th May and Wednesday 13th May, only 10% behind the same day in 2019. On the rental side, demand surged, with the highest unique enquiries in one day since September 2019.


Although there was no new seller asking price data to report (due to number of properties coming to market being down 90% on the same period a year ago), there were signs of fresh supply with a 111% week-on-week increase in new sales listings on 13th May.


Miles Shipside, Rightmove Director and Housing Market Analyst said:


The traditionally busy spring market was curtailed by lockdown, but we’re now seeing clear signs of returning momentum, with the existing desire to move now being supplemented by some people’s unhappiness with their lockdown home and surroundings. Some may be unable or unwilling to move now, but those who are ready to take the plunge have jumped immediately into action. Unique enquiries on property for sale doubled from the day before, though we expect consistent momentum to rebuild over several months rather than weeks..."

and:

“...These [government] guidelines are understandably stringent to make sure the process can be carried out safely. It’s especially important for the recovery of transaction volumes that prospective buyers and existing and future sellers feel reassured enough to re-engage with their pent-up housing needs, but safety is the top priority for all and so it will take time. All parties will have to be innovative to work effectively while adhering to these guidelines. There are many benefits, including freeing sellers of the need to maintain a constant state of tidiness and letting them avoid the frustration of no-shows often associated with frequent physical viewings. High demand could lead to a boost in values for properties that offer inspiring home-working options. But on the other hand, the extra value for a property being close to a popular commuter route may diminish if working from home becomes the new norm..."

The Rightmove report shares the perspective of three estate agents:


Nick Leeming, Chairman of Jackson-Stops, comments:


“Following the government announcement we experienced an immediate flurry of activity across our branch network. We have a strong pipeline of pending sales which started to move within the first hours of trading... Our immediate priority is to put the health and safety of our clients, their families and our teams first and are ensuring that our branches are fully aware of the Government’s latest guidelines. It is only then that our branches will be arranging physical viewings, valuations and meetings, which means that virtual video tours continue to be an important tool for selling or letting a property. Not only are they easily accessible and fully functional on mobile devices but they also importantly help reduce time spent in physical contact with clients and prospective buyers. In addition to offering a layer of safety for our employees and clients, virtual viewings will enable us to firm up leads and identify committed buyers ahead of physical viewings.” 

Marc von Grundherr, Director at Benham & Reeves, London, provided their position and of note stated:

“... I think we can now look forward to a swift restoration of market activity and in time to have prevented big price falls...”

Guy Gittins, Managing Director of London estate agents, Chestertons, stated:


”This is great news for the many thousands of people who need to move home but, as the government is keen to stress, this is not a return to normality and everyone has to adapt to the current situation. Physical viewings and valuations can now take place but video viewings will remain a major feature for some time to come and people are urged to make use of them in the earlier stages of their search and only physically view properties if they are genuinely interested and able to place an offer...”

Further details on this report are available here.



Zoopla


Housing demand in England rose by 88% following the re-opening of the housing market, according to Zoopla's latest monthly #UKCitiesHousePriceIndexReport. Buyer demand has risen above pre-lockdown levels.


Image: Zoopla


This report also indicates that the number of agreed sales is steadily rising although it will take time for these numbers to rise significantly. This is because it typically takes 2 months between a buyer starting their home search and a sale being agreed and a further 3 months to complete the transaction. 


Zoopla indicate that the reasons for the bounce may well be because of the extended amount of time people have been spending in their homes and then realising that it is no longer fit for their ongoing needs.


Richard Donnell, Director of Research and Insight at Zoopla, said:


“The COVID crisis and 50 day lockdown has created an unexpected one-off boost to housing demand.
Millions of UK households have spent a considerable amount of time in their homes over the lockdown period and missed out on hours of commuting.
Many households are likely to have re-evaluated what they want from their home. This could well explain the scale of the demand returning to the market.” 


Zoopla reported that there was no change in average house prices since March across the 20 cities included in their report. They also confirmed that around 60% of potential movers they spoke to said they’ll continue with their property plans.


Further details on this report are available here.



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