Large rural houses are most in demand with plenty of space a top priority, according to the latest report from property portal Zoopla.
Demand for houses has taken flight since the lockdown ended, especially for three- and four-bedroom houses with sufficient space to work from home. As buyers inundate the market, properties are selling far more quickly than before the pandemic took hold, the report says.
The time taken between a home coming onto the market and a sale being agreed has fallen to just 27 days since restrictions were relaxed, compared to 39 days over the same period in 2019. Urban flats typically targeted at first-time buyers now comprise the slowest selling sector of the market, while spacious homes in the countryside are selling the most quickly.
As buyers prioritise additional space and broaden their search criteria, they are shunning the more expensive cities, suburbs and commuter belts in favour of making their budgets stretch further. Consequently, four-and even five-bed houses are selling 33pc more quickly than in 2019.
Zoopla stated that the pent-up demand for housing released by the easing of the lockdown, and the short-term cut in stamp duty on properties up to £500,000 announced by the Chancellor in July, had driven sales of houses listed on its platform 76pc higher than the five-year average.
Although with the stock of houses for sale at estate agents 3pc down on last year’s levels, would-be buyers are to some extent limited for choice.
Housing market holding up well despite recession
The burgeoning property market is in marked contrast to the state of the UK economy, which shrank by more than that of any developed country in the second quarter of 2020, according to data from the OECD.
Richard Donnell of Zoopla commented that the reassessment by house owners of their residential requirements as a result of the lockdown has more than compensated for the impact of the recession on the UK housing market.
With holiday season sales running 78pc higher than last year, the customary August slowdown in the property market has all but disappeared this year. Nevertheless, Mr Donnell added, the property market could be impacted as schools reopen and the furlough scheme along with other government support measures are wound down.
House prices forecast to end year 2-3pc higher
A majority of professional forecasters reckoned on price falls in the UK property market during 2020, including Savills who in June predicted a 7.5pc fall in prices this year followed by a 5pc rebound in 2021. But Halifax, reporting earlier this month, said that house prices in the UK had leapt in an unforeseen spike to a record high in July.
The bank said a mini boom in the housing market had seen average property values surge by 1.6pc, or £3,770 month-on-month in July, increasing the annual rate of growth to 3.8pc.
Zoopla now forecasts that house prices will end the year 2-3pc higher than at the start. Substantial government support for the labour market and economy, combined with support for mortgage holders, has minimised the number of forced sellers and held house prices steady.
Consumer spending has recovered and surveys of economic activity indicate a wider boost to the economy, despite the fact that there has been a severe contraction and unemployment is rising.
Lenders urged to be lenient
On Wednesday, the Financial Conduct Authority (FCA) issued new guidance to mortgage lenders, urging them to show leniency to householders who are coming to the end of their payment holiday but are as yet in financial distress.
Some two million people have taken a mortgage holiday since the outbreak of the pandemic, equivalent to around one in six of all mortgages in the UK. Applications under the scheme can still be made until October 31.
The FCA, in its letter to lenders, expects customers to receive support that suits their individual circumstances and helps them through a period of payment difficulties.
Charlotte Nixon, mortgage expert at Quilter Financial Planning, said that based on the assumption that payment holidays will not be extended beyond October, the guidance is specific in that it is still very much the lenders’ responsibility to help customers navigate this difficult period.