International real estate consultancy Knight Frank reported last week in a press release that home buying offers are being accepted at record rates in uk property markets as the traction returns and price pressure slows down in the first month since market lockdown measures were lifted.
The number of offers accepted outside the capital was the highest ever on week ending 6 June, up 52% compared to the average for the past five years. In London, the figure was 34% above the average for the past five years and the third highest weekly figure in 2020.
Restrictions on property transactions in the UK were lifted on 13 May, after an eight-week period in which physical viewings stopped and demand remained silent. As the UK came out of the lockdown and the impact on the labour market was becoming clearer, the housing market and its performance improved.
The number of new potential buyers continues to increase. For markets outside London, the figure was the highest since May 2018 and was 14% above the five-year average. In London, the figure was 54% higher than the average of the last five years, but lower than the levels recorded earlier this year when the post-election bounce had an impact.
The price is reason that markets outside the capital are currently hitting record highs. Reflecting that, prices outside London have been more realistic for a longer period and are therefore now showing more resilience.
House prices outside the capital peaked in the third quarter of 2007, however they remain below this high point and growth has been moderate in recent years. Meanwhile, London prices are now between 20% and 40% above the peak of the pre-financial crisis of 2007, as shown in the chart below.
This price differential has been coupled with a trend for more buyers to seek outdoor space. While virtual viewings for properties in London were 13% below the five-year average in the week ending 6 June, outside London there was a 13% increase.
Relatively tight supply levels have also put a brake on price pressure in the first month since the housing market reopened, but more equilibrium is expected to return in the coming months.
Text: Paulo Lopes