UK property surge throughout COVID-19 providing “economic life raft”

 

Homemovers in the UK property market are an important part of the economy. And this consumer group will continue to help the country’s economic recovery in the wake of the COVID-19 pandemic.

More than 1.5m households in the UK are currently wanting to move, moving soon, moving now, just moved or currently settling in to their new property. According to a new report from consultant TwentyCi, there are over 550,000 property transactions in progress. And many of these homebuyers will be aiming to complete by the 31st of March to benefit from the stamp duty holiday.

The “Homemover Wave”, which applies to both buyers and renters, is up by 20% year-on-year. In Q1 2021, there has been a 27% increase in households who ‘want to move’ in comparison to 2019. Additionally, there is a 32% increase in those ‘moving soon’, a 47% rise in households ‘moving now’ and a 26% uplift in those that have ‘just moved’. However, there has been a 38% drop of households ‘settling in’. This is set to rise significantly as households in the other brackets progress through the homemoving process.

The rise in homemoving has provided a welcome boost to the economy. Homemovers are a valuable group of consumers, spending more than £12bn a year over the transaction value of their properties. This value adds an estimated 3% to GDP each year.

Colin Bradshaw, TwentyCi’s chief customer officer, comments: “The significant economic uplift delivered to the economy by the buoyant property market will be a life raft for many organisations that are weathering the COVID-19 storm as homemovers are the most valuable group of consumers that are ready to buy.”

Stamp duty holiday and changing priorities have been key

Last year all areas of England saw a substantial increase in sales agreed. Sales agreed in 2020 even surpassed figures from 2019 by more than 10%. This was fuelled by the stamp duty holiday, low mortgage interest rates and a change in property preferences. The market’s buoyancy has even provided a more robust market as price changes and withdrawals have been down.

The stamp duty holiday was on the of the key initiatives to stimulate both the property market and the economy. However, even before this announcement in July, homebuyers and renters alike were already reconsidering their living circumstances after the first national lockdown. New housing needs and lifestyle changes due to the COVID-19 pandemic have been driving huge numbers of buyers and sellers.

What kind of properties are the most desirable and where?

Across the board, there was an increase in the volume of larger, detached properties selling. Many homebuyers are looking for larger properties as a result of the successive lockdowns and the rise of working from home.

According to data from TwentyCi, the largest increase in sales agreed has been for four and five bedroom properties. This is an increase of 24% and 31% respectively. Sales of detached properties have also increased by 24%.

With this unprecedented level of demand, average asking prices also rose by £28,000 across the last 12 months to £374,000. Every region in the UK saw an increase. And the Midlands recorded the highest rise in asking prices with a 12% uplift. Inner London was home to the lowest increase with only a 2% rise. This further illustrates many people’s desire for more space.

Maintaining momentum in the UK property market

TwentyCi’s data shows the UK property market is continuing to maintain momentum against last quarter’s record high of 380,000 households wanting to move. A rush of completions is likely in the coming months as homebuyers look to beat the stamp duty holiday deadline at the end of March.

With this surge in transactions, many are unsure if conveyancers, lenders and surveyors can keep up with this level of activity before the stamp duty holiday deadline. In 2019, transactions took an average of 14 weeks from sales to completion. However, this is currently taking 22 weeks, according to View My Chain.

Industry professionals have been putting pressure on the government to extend the stamp duty holiday. Over 120,000 people have signed a petition to have Parliament to debate this. However, the debate was postponed as the use of Westminster Hall, where these debates are held, has been temporarily suspended.

Colin Bradshaw says: “Maintaining this momentum will be key to aid recovery and we anticipate further Government intervention to ensure this occurs meaning that the outlook for the property market as we move into 2021 remains positive.”

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UK property surge throughout COVID-19 providing “economic life raft”

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