Housing market fends off significant hit of second lockdown
While the second lockdown in England has had a detrimental effect on the country’s hospitality and leisure industries, the housing market is having an entirely different experience.
The early impact of the second lockdown is bearing little resemblance to the hit it took in March, according to estate agent Knight Frank.
UK house prices have shot up during the pandemic despite the worst economic downturn in a generation.
The housing market has been allowed to stay open during this lockdown unlike in the first wave of restrictions, when buying and selling were severely curtailed for six weeks.
The estate agent’s data shows that exchanges were up 11 per cent between Monday and Thursday last week, reflecting the large number of properties that have gone under offer since the market reopened.
That said data shows a number of agents saw some dropoff in activity after the announcement of a second lockdown. “Part of that was caused by some initial confusion around whether the property market was remaining open… In other cases, buyers and sellers are understandably taking extra precautions and delaying decisions,” said Tom Bill, head of UK residential research.
The number of viewings that took place between Monday and Thursday were down 15 per cent on the previous week, but the number of valuation appraisals rose 38 per cent over the same period.
Prospective buyers are likely moving quickly as the deadline for the stamp duty holiday looms. Indeed the number of exchanges in prime London markets reached its highest level in five years last month, although most exchanges still relate to deals that pre-date the first lockdown.
“If the second lockdown is not extended, it therefore feels like it will put a small dent in the performance of a resurgent property market; but little more,” said Bill.
Whether this dent becomes bigger depends on how quickly a vaccine for Covid-19 can be distributed and the avoidance of a “no-deal cliff-edge Brexit”.