x
By using this website, you agree to our use of cookies to enhance your experience.
By Gráinne Gilmore

Head of Research, Zoopla

OTHER FEATURES

Property supply and demand - what's the latest and what's in store?

We recently issued our Zoopla House Price Index, which analyses the latest real-time trends from the sales market.

In our analysis, we reported that:

• Just six weeks on from the reopening of the English property market, increased demand is tipping over into activity, with sales agreed across the UK now 4% higher than levels recorded in early March, before lockdown took hold.

Advertisement

• This rebound in demand levels emerged despite prolonged market closures in Scotland, Wales and Northern Ireland, but the trend seen after the opening of the English market has been replicated, with demand in Wales jumping 41% on its first day of operation compared to its previous seven day average.

• While new supply levels have been rising, the total available stock of homes is  15% lower than a year ago, which is also adding to the upward pressure on house prices (see figure 3).

Strongest sales rebound in northern cities, while Cambridge falters

• Leeds, Sheffield and Manchester have all registered a spike in sales agreed, with Leeds leading the way at 21%. This is being driven by the relative affordability of these cities, and also the availability of new supply.

• In contrast, Cambridge recorded the lowest number of new sales agreed of any English city since the housing market re-opened. Sales agreed were down -61% over the last two weeks when comparing these figures to the average from February 2020. This correlates with availability of stock in the city. Available homes to buy are some 39% lower in Cambridge year-on-year.

What is happening to house prices - and will they fall?

• Demand for homes is expected to weaken over summer and into the autumn. This reduced demand, compounded by a reduction in higher loan-to-value mortgages and the impact of COVID-19 on employment levels, could result in downward pressure on house prices from late 2020 and into early 2021.

• Caution amongst lenders and more limited availability of 90% loan-to-value mortgages will reduce demand, particularly amongst first-time buyers who - over recent years - have been an increasingly important section of the housing market.

• In 2019, a fifth of all homebuyers purchased a home with a deposit of 10% or less, so a decrease in the availability of 90%+ loan-to-value mortgages could preclude this cohort of would-be buyers from entering the market, effectively dampening demand.

What is in store for the Welsh housing market after it re-opened?

• Demand for homes in Wales has been building since the English market reopened, gaining momentum over the last two weeks.

• The number of homes for sale in Cardiff are currently 2% higher year on year - suggesting that supply is more readily available.

• House price growth in Cardiff is holding strong at 2.4% year on year, and the current average house price is £211,000.

To find out more about Zoopla’s House Price Index, please sign up here and be amongst the first to hear about our latest market research and insight.

Figure 1: Index of demand, sales and new supply of homes for sale

Source: Zoopla Research

Figure 2: Index of housing demand for sales - Wales, Scotland and England

Source: Zoopla Research

Figure 3: Available supply of homes for sale compared to last year


Source: Zoopla Research
 
Figure 4: New sales agreed compared to February 2020


Source: Zoopla Research

*Gráinne Gilmore is Head of Research at Zoopla

icon

Please login to comment

MovePal MovePal MovePal
sign up