Lifestyle changes are affecting the housing market more than Rishi Sunak’s furlough extension, according to a leading property analyst.
Richard Donnell, Zoopla’s research and insight director, said it was city dwellers selling their £1 million homes that was continuing to prop up the market. Being in lockdown for 50 days, he said, had encouraged them to move to a country or seaside retreat worth half the value of their former luxury pad.
As a result, he said, house prices would continue to grow – even until March when the current furlough scheme and Stamp Duty holiday are due to end. The property portal’s data shows 40% more traffic to their website than the previous year.
Donnell added: “The rate of growth at the end of next year will be less than 4 or 5%, but it will take quite a lot, and quite a dramatic change of circumstances, for house prices to go into negative territory at the end of next year.”
HM Revenue and Customs (HMRC) also noted high sales numbers, with 98,010 property sales going through in September. That number is an increase of 21% on August’s figures, although it is slightly down year-on-year at 0.7%.
London suburbs see biggest price jump for five years
But it’s not only coastal and rural areas that are benefitting. Even the outer suburbs of the capital are cashing in on the dash to get out Inner London. Upmarket estate agency Knight Frank say that at 0.9% they have seen the highest quarterly rise in prime property there for five years.
Home owners in Belsize Park were the biggest winners, with property rising 3.2% there. Next highest was Dulwich with a 2.3% increase in prices, Wandsworth had 2.1% and Wimbledon 1.8%.
London property letting market not as buoyant
Valuations may be higher for home owners, but landlords are seeing a drop in rental values in the prime outer London market, according to Knight Frank. High levels of supply had meant that rents fell 7.6%. In Inner London the drop was even steeper, at 9.1% for the year to October.
The reason there are so many more rental apartments available – 20% more than usual at this time of year – is because of uncertainty surrounding coronavirus.
Average UK house price worth £250,000 say Halifax
Meanwhile, another record was set this month. This time it was the turn of the Halifax House Price Index which recorded the average house price at worth more than £250,000 for the first time in its 37 years.
Lockdown 2 hasn’t had much effect on the property market – physical viewings are still going ahead (albeit in a socially distanced fashion). This compares to the first lockdown when such viewings were banned for a period of seven weeks.
Just one week after Lockdown 2 began, the number of house valuations had gone up by 38%. This second lockdown is due to end on December 2 – but not, it seems, the continued desire for people to move home.