"The 95% LTV mortgage guarantee scheme and the stamp duty extension outlined in the Budget have led to a spike in buyer demand, which was up 24% in the days following the announcement."
The supply of new homes for sale is still constrained, down 13% this year compared to the 2020 average. However, the volume of homes for sale is expected to recover as the Covid vaccination programme continues to gather pace and the Prime Minister’s roadmap out of lockdown comes into effect.
Sales agreed are up 5.3% compared to the same period in 2020, powered by demand, which in turn is expediting the speed at which sales are being agreed.
Zoopla's data shows that the average time to sell a property in the UK has fallen by nearly a week across the UK excluding London, down from 50 days in 2020 to 44 days now.
The North East and the North West have recorded the highest reduction in time to sell on a regional level, falling by 17 days and 12 days respectively. At the same time, the North West and Yorkshire and the Humber are the fastest moving markets in the UK, with sales agreed on properties in an average of just 38 days from the point of listing.
The pandemic is continuing to polarise demand for property, with houses now selling three weeks faster than flats. The lockdown-led ‘search for space’ means houses are taking an average of 42 days to go from the point of listing to sale agreed, compared to 62 days for a flat.
Demand for three-bed homes jumped by 30% in the week after the Budget; these family homes are still the most coveted type of property across the UK. Such demand is also pushing up price growth for houses, with the average value of a house rising 4.9% on the year, compared to 1.9% growth for flats.
Across England, Zoopla estimates that there are currently around 130,000 homes for sale that will attract no stamp duty until the end of September, amounting to a potential stamp duty saving of £123 million, which will only increase as more properties are listed for sale.
Overall, Zoopla anticipates that more than half a million buyers this year will benefit from some level of stamp duty relief.
From a national perspective, average home values are up 4.1% since the start of the first lockdown. While annual house price growth is down slightly from 4.4% last month, this marks the fourth consecutive month of house price growth over 4%.
Regionally, house price growth in the Midlands, North of England, Wales and Scotland are at an almost ten-year high, fuelled by the relative affordability in these markets. This is juxtaposed against house price growth in the South of England, which is up on last year, but relatively muted compared to the highs recorded over the past decade.
At a city level, Liverpool and Manchester continue to show the strongest levels of annual house price growth, up 6.6% and 6.4% respectively.
David Ross, managing director of Hometrack, commented: “The 95% LTV mortgage guarantee scheme and the stamp duty extension outlined in the Budget have led to a spike in buyer demand, which was up 24% in the days following the announcement. The stimulus provided by the mortgage guarantee scheme will likely promote a similar increase of uptake of higher equity loans from the knock-on in demand up the property chain.
“With time to complete standing at around four months, buyers in the North of England look set to benefit the most – with two-third of local stock under £250k in value, and therefore always exempt from stamp duty.
“While prospects for the wider housing market have improved on the back of the Budget, the post-lockdown path to the full reopening of the economy and unwinding of support measures will still have a big impact.
“Therefore, we still expect house price growth to moderate later in the year, but overall transactions look set to get an additional boost from the stamp duty measures.”
