A new report by WeBuyAnyHome has outlined the impact of the coronavirus pandemic on the UK housing market, revealing that house sales enquiries have plummeted by 32% on average compared to 2019 as widespread lockdowns and market turbulence dampen appetites to buy.
The data compares house sales enquiries from January to September 2019 to the same period in 2020, as well as analysing the fluctuation in sales demand during the pandemic by comparing figures from Q1 to Q2 across this year.
According to the report, house sales enquiries in Scotland have also dropped by a whopping 48% in Q2 2020, although the few UK regions which have actually seen an increase in enquiries over recent months were all located in Scotland: Edinburgh (+53.50%), Clackmannanshire (+40.00%) and Dunbartonshire (+11.80%).
In the North, however, the housing market has essentially stagnated due to the pandemic. Lancashire saw enquiries plunge by 38.4% compared to last year, while North Yorkshire suffered a 39.2% blow as predominantly low-income families have struggled to sell.
As could be expected, London appears to have performed better than the rest of the UK, with sales enquiries down a meagre – but still significant – 14.2% in the last year.
Some of the capital’s surrounding counties have seen a major drop in demand, however, with enquiries down 32.7% in Essex and 25.5% in Kent.
Despite the apparent apprehension to buy, mortgage approvals reportedly hit a new 13-year high in September – with banks signing off on 91,500 mortgages – and the Bank of England citing the stamp duty holiday and the demand for more space during lockdown as driving the desire to move.
Strict lockdown measures which came into force in the Spring essentially ground the housing market to a halt, but in recent months a “housing boom” has made up for lost time, although some are sceptical that the trend has much longevity.
Andrew Montlake, managing director of mortgage broker Coreco, warned last month that the market boom is likely to lose steam:
“The post-lockdown bull run is already over. Lenders have been pulling down the shutters due to ongoing struggles with capacity and concerns over rising unemployment levels, specifically the impact on house price growth”.
So the figures are confusing. Sales enquiries have clearly taken a hit this year – particularly in the North of England – and even with a couple of months of new-found growth in the sector, investors would be right to view the recent trend with some caution.
Once the stamp duty holiday comes to an end in March next year, and with a Brexit decision (deal or no-deal style) on the horizon leaving markets suspended in a seemingly permanent state of confusion, the momentum may well drain from the housing market on the other side of the New Year – or possibly even before.