A year on from the first lockdown and houses are selling three weeks faster than flats with 3-bed detached houses the nations favorite …
The recent Budget stimulated an +80% spike in buyer demand for property compared to the four year average, according to the latest findings by Zoopla, the UK’s leading property portal, in its monthly House Price Index. However the supply of new homes for sale is still constrained, down 13% this year compared to the 2020 average. However, the volume of homes for sale is expected to recover as the Covid vaccination programme continues to gather pace and the Prime Minister’s roadmap out of lockdown comes into effect.
Time to sell falls by a week
Sales agreed are up 5.3% compared to the same period in 2020, powered by the sheer demand in the market, which in turn is expediting the speed at which sales are being agreed. The average time to sell a property in the UK has fallen by nearly a week across the UK excluding London, down from 50 days in 2020 to 44 days now (see diagram below).
In contrast, London is the only region in the UK where properties are taking slightly longer to sell, which is a reflection on the strength with which the market bounced back in early 2020 in the aftermath of the General Election, but also signals the impact of Covid-19 on London’s residential market, particularly in central areas.
The North East and the North West have recorded the highest reduction in time to sell on a regional level, falling by 17 days and 12 days respectively. At the same time, the North West and Yorkshire and the Humber are the fastest moving markets in the UK, with sales agreed on properties in an average of just 38 days from the point of listing.
The pandemic is continuing to polarise demand for property, with houses now selling three weeks faster than flats. The lockdown-led ‘search for space’ means houses are taking an average of 42 days to go from the point of listing to sale agreed; this compares to 62 days for a flat.
Demand for three-bed homes jumped by 30% in the week after the Budget; these family homes are still the most coveted type of property across the UK. Such demand is also pushing up price growth for houses, with the average value of a house rising 4.9% on the year, compared to 1.9% growth for flats, reflecting the ongoing divergence in demand.
While demand for flats is down across most of the country, the Budget instigated an uplift for one and two-bed flats in London and the South East. This indicates increased buying intent amongst first-time buyers, whose capacity to buy will be boosted by the 95% mortgage guarantee once it comes into play in April. It also goes some way to reverse the fall in first-time buyer share of sales in 2020, in the wake of reduced high loan-to-value mortgage lending.