Demand for property has increased by 88% as the English housing market reopens and exceeds pre-lockdown levels.
The housing market in England reopened two weeks ago with demand surging 88% according to the Zoopla Cities House Price Index and is 20% higher when compared to the start of March.
Across Britain 60% of prospective home movers intend to continue with their plans to buy a new property whereas 40% have decided to delay due to the Coronavirus uncertainty.
Sales agreed in England by first time buyers, home movers and buy-to-let investors are higher by 12% from a low base and remain only a tenth of the sales volumes for the same period last year.
Boost to housing demand is one-off
Higher activity reflects pent-up demand after the housing market was closed for 50 days at busy time of the year and buyers reviewing their property needs including working from home in the future.
The recent spike in demand could be one-off, falling back in the medium term with higher unemployment and reduced economic activity in the second half of the 2020 due to Covid-19.
This Zoopla table shows the leading ten city house prices and growth over the year to April 2020.
| City | Current price | Annual growth |
|---|---|---|
| Nottingham | £158,000 | 4.1% |
| Leicester | £183,700 | 4.0% |
| Manchester | £173,200 | 3.8% |
| Leeds | £169,200 | 3.1% |
| Edinburgh | £232,500 | 2.9% |
| Liverpool | £121,800 | 2.7% |
| Birmingham | £167,100 | 2.5% |
| Cardiff | £210,500 | 2.5% |
| Bristol | £280,700 | 2.4% |
| Sheffield | £138,700 | 2.2% |
House prices have remained similar to March with home buyers moving forward at price levels agreed before the lockdown.
Over the year Nottingham house prices remain 4.1% higher than last year with average property values of £158,000 with London slightly higher up 1.1% and values of £476,900.
For older equity release buyers the current stable house prices give them an opportunity to access cash in their property with a lifetime mortgage to improve their quality of life or purchase a new car.
Lenders are focusing on existing clients and remortgage buyers at the end of your mortgage deal can switch to a new deal with low interest rates reducing their repayment costs.
Housing market outlook remains uncertain
There are 373,000 sales remaining from March unable to proceed due to the lockdown and the reopening of the market has improved the chances of more of these completing.
With the boost in buyer demand the housing market depends on how many convert to new sales and the prices agreed will determine the outlook going forward.
First time buyers are likely to compete with buy-to-let investors looking to secure property at a reduced price from homeowners keen to move to a more suitable property offering more space.
According to Zoopla, 59% of those intending to move before Coronavirus still intend to and 41% are delaying moving due uncertain economic outlook, falling house prices and risk to their finances.
Most important is the return of higher loan to value mortgages in excess of 90% which are being limited by providers but essential for first time buyers with smaller deposits.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even help your children start or expand a business.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage costs calculator and equity mortgage release calculator.
