The third national lockdown has created a perfect storm for the property market, with a slowdown in the flow of new supply for sale as demand rebounds. These are the latest findings by Zoopla in its latest House Price Index.
According to Zoopla, a record number of COVID cases and calls to uphold social distancing appear to have made some would-be home sellers reluctant to list their property for sale this year.
The company stated: “In the first few weeks of 2021, the flow of new homes coming to the market for sale was 12% lower than 12 months prior. That said, we believe that falling case numbers and the easing of restrictions, or a return to the tier system, will unleash pent-up supply. By contrast, buyer demand for property has rebounded after the Christmas break - growing even faster than at the start of 2020. In the three weeks to 17 January, demand for homes was 13% higher than the same period a year ago when the market had started to rebound in the wake of the General Election.”
More than a stamp duty incentive
Increased buyer appetite over H2 2020 has been largely attributed to stamp duty relief, but Zoopla believes that it is more than the deadline motivating home movers.
Richard Donnell, research & insight director at Zoopla, said: “While early January is typically one of the busiest times for new buyers, this year activity is compounded by the impact of the pandemic. With more time spent at home, and more pressure on homes to deliver than ever before, more homeowners have realised that their home falls short and have been galvanised to move. Rising house prices have also created more equity in people’s homes, adding further impetus - and financial ability - to move.
“The strength of the sales market in H2 2020 saw 47% more sales agreed than the same period in 2019. This absorbed a lot of available supply and means we are starting 2021 with the total number of homes available ‘for sale’ 6.4% lower than a year ago. If sellers remain cautious and supply scarce, the choice for those in the market will be limited, which will continue to push house prices higher.”
