The U.K. housing market is stronger than it’s been in five years, as people rush to rearrange their living arrangements in the wake of the pandemic, according to a new report.
The number of agreed-to sales across Zoopla, one of the country’s major listing sites, is 76% higher than the five-year average, with strong activity at the higher end driving deals in and around London, the website said in a report released Thursday in the U.K.
So far, the deepest recession on record has yet to slow home shoppers. Since the British housing market began to reopen in mid-May, robust demand has shaved two weeks off the average selling time compared to the same three-month period ending in mid-August.
“Housing market conditions remain unseasonably strong,” said Richard Donnell, research and insight director at Zoopla. Home shoppers are overwhelming available inventory, a dynamic Mr. Donnell said he expects will drive moderate price growth this year—even in the face of a prolonged economic recovery.
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A mass shift in people’s housing requirements and tastes is acting as a “counterweight” to the recession, he added. As a result, Zoopla predicted prices will end the year 2%-3% higher than 2019.
Strong activity in the luxury segment is helping boost average sales prices, as affluent families feel less financial impact from the lockdowns earlier this year. A wave of higher-end listing has driven up the average asking price on Zoopla 8% compared to last year.
In London, prices rose 2.1% in July compared to this time last year. That growth marks a significant turnaround for the city, which has endured a yearslong slump in the wake of stamp duty hikes in 2014 and 2016.
Demand is particularly strong for three-bedroom properties, which are selling in only 24 days, according to Zoopla’s analysis. Meanwhile, even larger homes, with four or five bedrooms, are trading hands 33% faster than in 2019.
Meanwhile, a measure of demand is up 34% so far this year compared to 2019, even despite several months of market paralysis from March to May.
“The next important milestone for the housing market comes in September, when schools reopen and the U.K. starts to get back towards a full reopening of the economy,” Mr. Donnell said. “The unwinding of the furlough scheme and other government support is the next challenge that will test the strength of economic recovery.”
Source: MansionGlobal
