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Market Update: House Prices up 2.4%


Zoopla's latest House Price Index (May 2020) has confirmed that house prices are up 2.4% (up from 1.6% at the beginning of the year) and agreed sales are up 4%, compared to pre-lockdown levels.


This latest Index also confirms that this pace is likely to continue until at least this autumn, with 2-3% on average likely to be added over the coming three months. Zoopla anticipate that if there are price falls, they will not be visible by the end of the year.


Lender caution and more limited availability of 90% mortgages will reduce demand, particularly for first time buyers.


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


“The rebound in housing market activity has taken many in the industry by surprise. It is welcome news given the projections for falling economic growth and rising unemployment. Estate agents and developers are responding and using the upsurge in demand to rebuild their sales pipelines and open up their developments.”

The UK buyer demand level across is 46% higher than it was in early March, when demand for housing fell by 70%.


Outlook

Richard Donnell, says:


“We see returning pent up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown. House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.”

and

“While the average asking price for homes marked as sold on Zoopla are seven per cent higher than a year ago this is down to an increase in sales in higher value markets where activity has remained subdued in recent years. We do not expect the rate of growth in the Zoopla House Price Index to reach this level, rather it is expected to hold steady at two per cent”.


Slowest and Fastest Growing Cities


This Index also covers the position across 20 cities and Zoopla have shared the following dataset about the fastest and slowest growing cities - Manchester prices are growing the most and Aberdeen prices are contracting the most over a 12 month period:




Image: Zoopla


If you'd like to read more about this Index, click here.



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