Lockdown puts 373,000 property transactions on hold

Around 373,000 property transactions with a total value of £82bn are on hold as a result of the UK Government’s lockdown restrictions effectively suspending the housing market, according to new analysis from Zoopla.

The property expert’s latest UK Cities House Price Index suggested the majority of the sales were agreed between November 2019 and February 2020, and would have been set to complete between April and June.

Aside from the 373,000 sales suspended in the pipeline, which Zoopla noted may still be completed later in the year, a handful of sales are still being progressed earlier in the process – largely based on viewings and the progression of sales that took place before the Government imposed lockdown.

The index suggested that new sales agreed are running at a tenth of the levels recorded in early March, with volumes similar to what would be expected in late December – although Zoopla also suggested some buyers intend to press ahead with agreeing sales, encouraged by government support for the economy and low mortgage rates.

Zoopla director of research and insight, Richard Donnell, suggested there is a “two speed housing market at present”.

“Parts of the market are at a virtual standstill as a result of the physical restrictions that have stopped new supply coming to the market and the viewing of homes for sale,” Donnell commented. “However, the online browsing of homes for sale and buyers expressing interest in property have been rising off a low base over the last two to three weeks.

“Demand for housing is still 60% lower than at the start of March, but we expect interest in housing to continue to improve slowly.

“Sales continue to be agreed in low volumes by purchasers who viewed homes ahead of the lockdown, but there is a large pipeline of agreed sales held up by the temporary suspension of the sales market worth £82bn. In addition, these sales will generate associated spend resulting from housing transactions that can stimulate economic activity.”

The index also highlighted that while households are unable to view homes for sale in person, they can still browse online.

Zoopla found the browsing of property listings had fallen in line with demand, albeit to a lesser degree, but that levels had bounced back more strongly over the last three weeks. However, these levels still remain 35% lower than they were at the start of March.

“Without doubt, once the coronavirus restrictions are relaxed, we should expect the release of demand that has been building since Brexit and political uncertainty destabilised market sentiment,” Donnell added.

“That said, the case for a stamp duty holiday to support a resumption of market activity is clear and a high proportion of savings are likely to be spent, further stimulating economic activity.

“It is too early to register any pricing impact given new sales volumes are 90% down on the start of March. Demand is rising but there is a long way to go until we see a return to typical levels of market activity.”

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