Spike in demand for property to be ‘short-lived’

Spike in demand for property to be ‘short-lived’

A sharp rise in buyer demand after the restart of the housing market in England has been predicted to be relatively short-lived, according to property market analyst Hometrack.

Buyer demand across England rose by 88 per cent in the week to May 19 and exceeded levels before the lockdown. This comes after the government announced that anyone in England could move home as of May 13 under new guidance.

However, the report by Hometrack also noted any rise in demand would face headwinds from an expected rise in unemployment and a major downturn in economic growth in the second half of 2020 and into 2021.

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The firm said: "We expect the recent spike in demand to be relatively short-lived, with demand likely to moderate over the coming weeks.”

Additionally, the Hometrack UK cities house price index for April showed annual price growth of 1.9 per cent, a small reduction in the annual growth rate from 2 per cent in March.

Hometrack said it expected this decline “to become more marked in the months ahead”.

The data also showed new sales agreed in England had increased by 12 per cent since the market reopened on May 13, rising from levels that were a tenth of typical sales volumes at this time of year.

Mortgage advisers said they had been approached by buyers looking to capitalise on the post-lockdown market and snap up properties for a perceived bargain.

Others have expressed caution over any perceived uplift in consumer confidence.

James Forrester, managing director of estate agency Barrows and Forrester, said an uplift in demand for homeownership was “always on the cards following the reopening of the property market”.

Mr Forrester added: “This will level out as estate agents begin to facilitate this activity on both the side of buyers and sellers and it will certainly help to quell the huge uplift seen in recent weeks. 

“However, this trend is unlikely to subside altogether and this ongoing demand will help to stabilise the market from a price point of view over the coming months.”