The mini-boom continues unabated. Rightmove reports August was the busiest month in ten years, with the highest number of sales agreed in a calendar month since they first started tracking the data ten years ago.
There were 20% more deals agreed than during the previous high (March 2017) and the sales topped £37 billion (another record). Supply levels are also making a strong recovery, as new listings hit their highest level since 2008. What is even more remarkable is that all this is happening during the usually quiet summer months. When compared to August last year, there has been a massive 60% increase in the number of sales.
All this increased activity has put a huge strain on many parts of the sales process, including all the legal and lending aspects. There are increasing reports of delays and these may become more acute as the stamp duty holiday comes to an end. Many commentators are now advising would be buyers and sellers to get moving as fast possible to avoid missing out.
The mini-boom’s effects, however, are not universal. It’s being driven by both the Stamp Duty holiday and the new set of priorities that have come out of the Covid crisis. As a consequence, there is an emphasis on gardens and open spaces rather than commuter times and so we are moving away from flats and the centre of towns and are, instead, heading towards the suburbs and the country beyond.
This trend has been further exacerbated by the shortage of available mortgages for first times buyers, leading to a reduction in demand for flats in more central areas where the young tend to buy. At the same time, activity and demand from international buyers has also fallen. This has resulted in what many commentators are calling the ‘doughnut effect’ with the housing market relatively subdued in more central, metropolitan areas.
Miles Shipside, Rightmove director and housing market analyst advises:
”With work and transport patterns potentially changing most around the capital, commuter-belt properties need to have more appeal to prospective buyers than just proximity to a station. Many buyers do appear to be satisfying their new needs in these regions, as the number of sales agreed in each is also at a record level. The out-of-city exodus has helped push prices to record levels in Devon and Cornwall, for example, where working from home means a different lifestyle much closer to your new doorstep.”
“While property is selling much faster than a year ago, it’s important not to over-price and miss this window. It’s still a price sensitive market with buyers having limits on what they are able to borrow, and the uncertain economic outlook making them more cautious.”
It is a trend that is likely to be only temporary, as when we return to work, our commuter costs mount and our cities come back to life, our priorities will change once again.