Zoopla says while there may be speculation about people fleeing London and big urban areas for the countryside, the evidence suggests that short term demand for city properties is holding firm.
However, in its city-based research, Zoopla does admit that demand within London has shifted from the central area to outer and commuter areas - and particularly to properties with gardens.
“We see this as a shift in consumer focus rather than a structural change in market fundamentals. As cities start to re-open, we expect some rebalancing in between demand for homes in higher density areas of cities and their suburbs and commuter hinterlands” says the portal in its latest market snapshot.
In the wider market, Zoopla says new sales agreed are running 28 per cent above pre-lockdown levels as the surge in demand converts into actual sales.
The market suspension reduced the flow of new supply and sales agreed by 90 per cent but the portal warns that while these measures are now rising ahead of their pre-COVID levels, the increase in sales and supply since the start of the year is actually lagging 20 per cent behind compared to 2019.
In contrast, demand for housing has rebounded strongly as pent-up demand returns to the market.
In the last month demand from buyers has been double that of the same period in 2019.
On a cumulative basis, since January 2020, demand is running 25 per cent higher than the same period in 2019 despite the lockdown and market closure.
Zoopla says: “Our analysis shows this is primarily ‘catch-up’ demand for what was lost over lockdown, and it’s estimated that returning buyers account for 80 per cent of levels that would have been expected over this period in 2020 had COVID not struck.”
The good news from all of this, the portal suggests, is that there is a widening gap between supply and demand, and this is expected to support house prices over the second half of 2020 with year on year declines in capital values unlikely before the year end.
Richard Donnell, Research and Insight Director at Zoopla, adds: “COVID and the lockdown have shifted the dynamics of supply and demand across the housing market. The staggered reopening of housing markets across countries and the added impetus from the stamp duty holiday mean we expect buyer demand and new sales volumes to hold at current levels over the next two months.
“The net result will be continued support for house price growth at current levels over the second half of the year. Regional cities in northern England and the Midlands have the strongest underlying trends.
“For those operating in the market, and others looking in, the latest forecasts for increased unemployment and a sharp economic contraction over the next 12 to 18 months certainly seem at odds with current levels of sales market activity.
“We expect rising unemployment to weigh on market activity over the final quarter of 2020 and into the first half of 2021. The impact on pricing looks set to be pushed into 2021 as a result of sizable government support for the economy.
“Further support cannot be ruled out while forbearance by lenders, and the availability of the mortgage payment deferrals, which can start up until the end of October for three to six months, is likely to limit the scale of downside for house prices. Much depends on how businesses respond to the outlook and their decisions on staffing levels and the knock-on impact for unemployment.”