New sales agreed return to early March levels

Four weeks on from the reopening of the property market and a rapid rebound in demand* for homes has been followed by an unprecedented rebound in new sales agreed, which are now tracking close to early March levels.

The average asking price of sales agreed in the last week were 6% higher than in June 2019, suggesting house price indices may not register immediate price falls in the short term.

The latest analysis from the our research team, tracking trends across Zoopla’s property platforms up until Sunday 7 June, shows that:

  • Demand for housing is now 54% higher than at the start of March, as pent-up demand returns to the property market. Moreover, evidence shows that COVID-19 has created a one-off boost to demand and brought a whole new cohort of would-be movers into the housing market in the last four weeks since the market reopened

  • New sales agreed have rebounded and are just 12% short of the levels seen in early March as buyers return to the market and agree to new purchases; we have seen the number of new sales agreed rise by 137% since the market reopened

  • At a regional level, new sales agreed are being recorded in regional housing markets across England. London is lagging behind as buyers look outside the capital. Scotland and Wales continue to record low levels of new sales as their markets remain closed [see figure 2]

  • The higher the price band, the greater the increase in the volume of sales agreed compared to pre-COVID; nationally, £1m home sales are 16% higher than in early March although they account for just 3% of overall sales agreed in the last week (to 7 June)

  • Sales are higher across all price bands nationally but demand for housing has increased at a higher rate for higher value homes as homeowners look at trading up for more space or moving to a better location

  • The average asking price of homes being marked as sold subject to contract on Zoopla in the last week is 6% higher than a year ago. The annual growth asking prices for agreed sales are picking up where they left off pre COVID having fallen slightly over the lockdown

Commenting on the findings, Richard Donnell, our director of research and insight, said: “The rebound in housing demand over the last month is not solely explained by a return of pent-up demand.

“COVID-19 has brought a whole new group of would-be buyers into the housing market. Activity has grown across all pricing levels, but the higher the value of a home, the greater the increase in supply and sales as people look to trade up. New sales in London are lagging behind as buyers look at commuting and moving into the regions.

“Higher asking prices for newly agreed sales means that house price indices may not register immediate price falls. Lower asking prices for homes sold over the lockdown period may drag down indices over May, but this new data suggests house price growth is set to remain positive in the next two months.

“We still believe that this spike in demand will be short-lived as the economic impacts of COVID-19 start to feed through into market sentiment and levels of market activity in 2020 H2.”

For more market insight straight your inbox, make sure you’re subscribed to Zoopla Advantage.