Buyer demand is up a third this year and no signs of losing momentum with house sales 76% higher over the five year average.
The strong rebound in the housing market since lockdown has seen demand up 34% over the same period last year and house sales 76% ahead of the five year average according to the Zoopla UK House Price Index.
More demand from first time buyers and home movers has increased the number of sellers with the supply of new homes to the market 50% faster than last year.
Even so the amount of inventory available to agents remains 3% lower than last year and this is helping house prices to remain high while demand is strong.
City house prices expected to rise
House price growth in cities remains steady and expected to rise during 2020 with 16 out of 20 cities recording growth of 2% or more and up to 4% for Nottingham and Manchester.
This table from Zoopla is for the leading ten city house prices and growth over the year to July 2020.
| City | Current price | Annual growth |
|---|---|---|
| Nottingham | £158,500 | 4.4% |
| Manchester | £174,100 | 4.0% |
| Leeds | £169,900 | 3.6% |
| Liverpool | £122,900 | 3.3% |
| Edinburgh | £229,100 | 3.0% |
| Leicester | £183,300 | 3.0% |
| Birmingham | £167,700 | 2.9% |
| Bristol | £279,900 | 2.9% |
| Sheffield | £139,000 | 2.8% |
| Cardiff | £207,900 | 2.7% |
UK house price inflation is being supported by a combination of strong demand and sales as buyers consider their housing needs for space with work expectations.
Higher prices may give remortgage buyers the opportunity to release capital which they can use to improve their home such as an extension to provide more room when working from home.
There has been a slowdown in average city house price rise from 2.7% in June to 2.5% in July and the three-month rate has halved to 0.6%.
Zoopla does not see a major decline in house prices due to the Covid-19 induced recession and although demand in August has softened the housing market momentum is expected to continue.
Not all houses for sale are moving quickly and buy-to-let investors may offer prices at a significant discount to asking prices to improve rental yields after interest payments.
Although the lockdown has seen the economy contract rapidly the key for a buoyant housing market is the level of unemployment, household income and access to mortgages and rates.
Homes selling faster than last year
The average time to sell a property since lockdown is 27 days which is a 31% fall compared to the same 3-month period last year.
Buyer needs and priorities have shifted to larger houses rather than flats with three-bedroom homes selling the fastest in just over 24 days compared to flats taking 31 days.
Slowest property to sell is a one-bedroom flat at 34 days and two-bedroom flats at 32 days with three-bedroom houses the most popular with home movers in London and the South East but in short supply.
The times to sell have reduced the most for larger homes with a four-bedroom house selling in 29 days compared to 45 last year and a five-bedroom house is selling in 32 days down from 48 days.
According to Zoopla, there are an increased number of sellers in wealthy demographics with half of all homeowners having no mortgage and a large proportion with equity.
For older homeowners looking for a change of lifestyle from the city to the coast, equity release buyers can use a lifetime mortgage to buy a more expensive home.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth to consolidate debt, home improvements or gifting to a family member.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, property value tracker chart and mortgage monthly costs calculator.
