The cogs of the UK housing market began to turn again in May 2020 when the government announced new rules around property viewing, valuations, and surveying, which allowed house moves to get underway.
People looking to buy or sell now had more options to do so after a 3-month standstill. The introduction of a stamp duty holiday in England, for properties up to £500,000 also gave a further boost to the industry, as now buyers could save up to £15,000 on their house purchase.
Summing the current market position nicely, the July 2020 Residential Market Survey by RICS, carried the headline ‘Activity rebounds firmly but caution remains on the longer term outlook’.
Short term figures
We have seen an emerging recovery across the board for short-term results, but respondents are relatively cautious of improvements being sustained on a longer-term level as 12-month sales expectations are negative.
Of those surveyed 75% reported an increase in enquiries in July, following similar activity levels in June, which compares favourably with the slump in March and April.
New instructions being listed on the market rose sharply, with 59% of contributors noting an increase, a significant rise over a -22% fall in May. Unfortunately, the average number of properties on an agents’ books has remained at an all-time low.
Newly agreed sales have moved into positive territory for the second consecutive month, with 57% of contributors noting an increase in transactions in July, a steady increase from June’s 43%. A majority of respondents also expect to continue to rise in the coming three months.
In the lettings market, a majority of survey respondents reported a strong recovery in tenant demand over the quarter to July, in stark contrast to the previous quarter, when the majority reported weak market figures.
Rental growth expectations for the next three months also recovered, with the net balance of optimistic respondents rising from -35% previously to +20%. For the year ahead, contributors continue to project rents will rise by just over 1% at the national level.
Long term figures
Participants of the survey felt confident in the short term figures but showed their nerves whilst discussing the 12-month projections.
RICS saw a common theme, with their contributors thinking the challenging economic climate will dampen market conditions for some time to come, with the end of the Governments Coronavirus Job Retention Scheme likely to hit many households hard.
The RICS report showed house price growth had returned positive numbers for the first time since March, with 12% of respondents seeing an increase in house prices during July, which is a significant turnaround on the -13% registered in the June report.
Similarly, a study by national estate agency Savills predicts a -7.5% dip in the housing market over 2020 only to improve by 5% for 2021, with an 8% rise in 2022, before returning to a steady 5% and 4.5% in the following two years.
All of which goes to show that despite the dire predictions for the UK economy in what remains of 2020 and 2021, the property market remains buoyant and is expected to outperform many sectors, despite the significant impact of COVID-19.
Whether you have properties in your sights, ripe for refurbishment and development or you want to fund the purchase of land for a ground development of new homes, here at Signature, we have an extensive range of flexible, short-term property finance products waiting, so please get in touch.