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Pent up demand fuelling housing market

Housing market activity is bouncing back to higher levels than before the lockdown based on home sales, demand and house price growth, Zoopla’s House Price Index has found.

The number of agreed home sales has rebounded by 4% between early March and May.

House price growth has risen to 2.4% in May, up from 1.6% at the start of the year.

Meanwhile buyer demand in May was 46% higher than in early March, when demand for housing fell by 70%.

Rob Bence, CEO at Property Hub, said: “A 4% rise in sales against pre-COVID levels isn’t surprising. The government hit pause on the market back in March but we’ve since opened up to around three months of pent-up demand.

“I don’t think we’ll see this demand weaken just yet, particularly not from buy-to-let investors who are as active as ever – highlighted by the fact we’ve had reservations within seconds of new deals coming to the market in locations like Manchester, Nottingham and Doncaster.

“House prices are unlikely to take a significant hit any time soon. If anything, the stimulus the government has created in response to COVID-19 is more likely to create one of the biggest property booms the UK market is ever likely to see.

“That financial stimulus won’t disappear – and neither will the drive for property purchases. As the world starts to return to normality, confidence will resume and the market will gather pace and accelerate at a faster pace than before lockdown.”