"The Covid crisis and 50 day lockdown have created an unexpected one-off boost to housing demand."
Buyer demand across England spiked by 88% after the market reopened, exceeding pre-lockdown levels, however this jump in demand is "temporary and expected to moderate in the coming weeks", according to Zoopla.
Zoopla believes that projections for a major decline in economic growth, as well as rising unemployment, will cause any rebound to be short-lived.
In its latest Index, Zoopla said: "After the market was suspended for 15% of the year at one of the busiest times for market activity, a return of pent-up demand was to be expected, especially given the strong start to the year."
The scale of the bounce back in demand has been varied across cities. Despite a large rise in demand, London’s recovery is lagging behind, alongside cities in Scotland, Wales and Northern Ireland, where the housing market is yet to reopen.
Zoopla’s data shows that demand has rebounded faster in cities along the south coast and in northern England. Portsmouth and Southampton are registering demand some 40% higher than in February this year with strong growth also recorded in Newcastle and Leeds.
Looking ahead to the remainder of the year, the latest report identifies two distinct aspects for consideration. Firstly, how many of the 373,000 stalled sales make it to completion and secondly, how much the demand for homes holds up and how much of this pent-up demand converts into new sales and pricing evidence.
Zoopla currently expects a "significant proportion" of agreed sales to continue, but warns that increased uncertainty over the economic outlook will see housing chains tested in the coming weeks.
Additionally, while demand for homes has grown, harder measures of market activity are increasing more slowly, reflected in the 40% of prospective buyers who said they have put their plans on hold.
New sales agreed, sold subject to contract, were running at 10% of normal levels over the lockdown period and have now started to increase off a low base, based on viewings from before the lockdown.
Zoopla says it expects sales volumes to increase further, "but at a more moderate pace given the typical two month lag between new demand entering the market and sales being agreed". Moreover, if available supply does not increase, then not all demand will be satisfied.
Zoopla also predicts that a slowdown in the rate of house price growth will "become more marked over the summer months" as the impact of the market suspension and coronavirus lockdown emerge in house price data for new sales.
Richard Donnell, director of research and insight at Zoopla, said: “The scale of the rebound in demand for housing is welcome news for estate agents and developers, but it is also surprising given projections for a sharp rise in unemployment and a major decline in economic growth.
“The Covid crisis and 50 day lockdown have created an unexpected one-off boost to housing demand. Millions of UK households have spent a considerable amount of time in their homes over the lockdown period and missed out on hours of commuting. Many households are likely to have re-evaluated what they want from their home. This could well explain the scale of the demand returning to the market. We need to see more supply come to the market to satisfy this demand.
“The economic impacts of Covid will grow in the coming months and uncertainty is building. The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued Government support for the economy. However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution. Further support from the Government can’t be discounted and would help limit the scale of the downside risks.”