house money invest

UK housing market rebound continues into August as demand keeps rising

The snowball effect of the UK housing market reopening in May is still gathering pace. But there’s much more behind the boom than the stamp duty cut, new research reveals.

Demand across the property industry is continuing its steep ascent, according to the latest research. Buoyed by the government’s stamp duty cut, low interest rates and a surge of new sellers, buyers are keen to make their move in the sector.

Numerous sources show how the UK housing market has been remarkably resilient throughout the coronavirus crisis. The latest index from Nationwide, for example, indicates an annual house price rise of 1.5% in July. Month-on-month, there was a steep increase of 1.7%. HMRC data also shows transactions leapt by 14.5% between June and July this year.

Now, Knight Frank’s Residential Market Outlook analyses the strong and fast recovery of the sector. It also points out that behavioural shifts as well as a new favoured market are at play.

Prime property could be leading recovery

Prime property normally refers to the most desirable and normally expensive homes in an area. And it seems to be recovering more quickly at the moment than other areas, says Knight Frank. According to data from the agency and Rightmove, this market segment has seen the biggest rise in deals since the end of lockdown.

Knight Frank says that in the week ending 16th August, the number of homes sold above £1m was double that seen in 2019. The annual jump for properties valued at £750,000-£1m was even higher. In this bracket, there were 119% more deals than last year.

For homes worth up to £500,000, transactions were more subdued although there was still an uplift. Knight Frank and Rightmove’s research shows the number of properties sold subject to completion increased by 53% annually in August.

The reason behind the rise

One of the biggest trends we have seen since the end of lockdown has been a behavioural shift among buyers. The much-touted “escape to the country” is now even higher on people’s priority lists. Many people living in smaller homes in more urban areas are now looking for greener locations with more space.

Other needs are coming to the fore, such as larger properties with home office space. As these homes tend to come at a premium, this could partly explain why higher end homes are getting snapped up.

Knight Frank points out that it is also a case of history repeating itself.

“A quicker recovery [in prime markets] tallies with a similar trend which took place during the period that followed the global financial crisis,” says the agent.

Will it continue?

The prime market may have been gathering pace over the summer, but it remains to be seen how other market segments will perform by the end of 2020. Property portals have certainly noticed a surge in buyer interest since the stamp duty cut.

However, the actual effects of this will not become apparent straight away, as sold statistics take longer to come through. Therefore, while prime property is currently leading the way, we should expect to see a further surge in sub-£500,000 deals down the line as sales begin to register.

The report concludes: “A stronger recovery at the top-end reflects the fact that such buyers financial position means they tend to be able to transact more quickly, whilst more affluent households are also less reliant on lending.”

“For now, pent-up demand, the stamp duty holiday and extension of the furlough scheme all continue to support a strong recovery in the market.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT