Home prices increased during June
The annual growth rate of house prices in the United Kingdom rose to 2.7% in June, after increasing 0.2% in the month according to the latest data from Zoopla.
Buyer demand has seen growth since the reopening of housing markets; however, the number of new homes listed has not experienced the same increases. This is creating an imbalance of low supply and high demand and is contributing to the growth in house prices seen in the Zoopla data.
Manchester, Liverpool, and Sheffield are in the six main cities by levels of annual growth in house prices. According to the data, London has seen the biggest changes in the market since the Chancellor implemented the tax holiday, as sales increased 27% in the weeks after the change in the capital.
“The dynamics of the offer and demand have changed.”
Using these findings, Richard Donnell, director of research and knowledge at Zoopla, predicted the outlook for the market and house prices in 2021.
Donnell said: “COVID and the blockade have changed the dynamics of supply and demand throughout the real estate market.”
“The phased reopening of housing markets in all countries and the added momentum of the stamp duty exemption means that we expect buyer demand and new sales volumes to remain at current levels over the next two months. The net result will be continued support for house price growth at current levels during the second half of the year. Regional cities in the north of England and the Midlands have the strongest underlying trends.”
“We expect the increase in unemployment to influence market activity during the last quarter of 2020 and the first half of 2021. However, greater government support for the economy cannot be ruled out, although tolerance by Lenders and the availability of mortgage deferrals, which can start until the end of October for three to six months, are likely to limit the downside scale of house prices. Much depends on how companies respond to prospects and their decisions about staffing levels and the impact of unemployment.”
“Sales levels will return to normal.”
Despite the increases, the number of sales agreed in the year to date remains 20% lower than during the same period last year, and sales volumes this year appear to be around 15% lower than in 2019.
Steve Seal, CEO of Bluestone Mortgages, added: “It is promising to see home sales return to pre-COVID levels and buyer demand to a healthy level, as indicated by current Zoopla figures. While the stamp duty cut should help increase demand in the short term, we will have to tackle a more crucial long-term problem: supporting the growing number of borrowers who cannot secure loans on the street once the pandemic wears off.”
“What is discouraging is that being rejected by mainstream finance could become the new reality for many after the crisis, particularly for the large number of people who have been financially affected by COVID-19.”
HICH LTD continues to work to offer the best property survey service, before, during, and after the pandemic; we have redoubled our efforts to maintain the quality standard that has made us a leading property survey company.
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