There’s been a huge rise in buying, selling and letting activity across the UK in recent months. With the housing market “running hot”, 2020 should see a strong end to the year in property.
The surge of activity that has taken place across the UK property sector over the past few months has been unprecedented. A new report from consultant TwentyCi reveals that transaction levels are now the strongest they’ve been in more than 10 years.
The very beginning of the year got off to a strong start. Factors like increased political and economic certainty, including the ‘Boris Bounce‘, played a big part. The coronavirus outbreak then came in to dominate the following months of the year, but the research shows this isn’t necessarily a bad thing in the housing market. Since quarter one, new instructions are up 16%, with sales agreed up 24%. Lifestyle changes and new housing needs as a result of the pandemic are driving huge numbers of buyers and sellers.
When comparing Q3 figures to the same period last year, the difference is even more marked. New instructions from sellers have risen by 36% year-on-year, with sales agreed increasing by 53%. TwentyCi‘s data also shows that 6% less properties for sale have been withdrawn from the market.
Exchanges should catch up
On a more sombre level, there has been an increase in sales falling through (14%) and price changes (8%). There’s also been a 40% fall in exchanges, but the report addresses this as being a direct result of the current challenges in the market causing delays.
“This reflects the conveyancing hiatus caused by lockdown. However, the significant increase in the volume of properties requiring mortgages, surveys and searches will undoubtedly lead to pinch points within the conveyancing process and potential chain delays.”
Colin Bradshaw, TwentyCi’s chief customer officer, adds that it is clear the housing market is “running hot” at present. The post-lockdown surge will present its own set of challenges to the housing market, which he describes as a “conveyancing bottle neck”.
He comments: “Whilst more properties are coming to market and being viewed and sold, there has not been an overnight increase in the capacity of surveyors, conveyancers, search providers or mortgage underwriters. We have not seen the capacity pinch with removers as yet but that must be following close behind.”
Where are people at with moving now?
TwentyCi’s report also looks at what stage people are at with moving house. This so-called “Homemover wave” applies to both buyers and renters. According to the report, the journey can last “several months”.
The data shows that the post-lockdown housing market surge means there are a lot more households under the ‘want to move’ and ‘moving soon’ brackets. This currently equates to 523,454 households and 407,389 households respectively.
The next stages will filter through over the following months, says TwentyCi. There are around 193,365 households in the process of moving right now, with 123,329 who have just moved. Finally, 182,748 households are ‘settling in’ to new homes after moving relatively recently.
Lettings back to normal levels
Despite some setbacks and logistical difficulties in the sector, lettings are largely back to normal, says TwentyCi. New instructions from rental property owners are down slightly by 1%. However, the number of lets agreed is 6% higher than it was pre-lockdown. Rental asking prices are also 6% higher than they were at the start of the year.
Last month, a report from ARLA Propertymark showed a big increase in tenant demand in the UK. Letting agents had an average of 97 newly registered tenants in July, up from 79 in June. This is also higher than pre-coronavirus figures, as there were an average of 88 prospective tenants per agency shop in January.
Void periods are also down, which is another indicator of demand in the market. ARLA stated that the average time a rental home sat empty between tenancies in July was three weeks, down from four weeks in June. Tenants are also generally staying in their rental homes for longer in the current climate.
Phil Keddie, ARLA Propertymark president, said: “We have seen a record-breaking level of rental stock, and demand from tenants continues to grow, providing a positive outlook for the future of the private rented sector.”
