"There is a sizable pipeline of business for the property, lending and conveyancing industry to convert into completed sales before Christmas and into Q1 2021."
The post-lockdown market resurgence has led to record high sales agreed, with Zoopla recording an additional 140,000 transactions in the purchasing pipeline compared to this time last year.
The figures also show that new sales agreed were up 9% year-on-year in June, growing to 42% in July, and peaking at 62% in August.
More demand also brings more supply to the market. London has seen the greatest increase in new supply - up 39% compared to this time last year, while the North East and North West have seen slower growth in supply.
At a national level, inventory is up 18% compared to a year ago and Zoopla says this will "act to keep house price growth in check". However, it added that much of this supply is also at higher average sales prices than a year ago "creating something of a risk to future sales volumes" should demand weaken materially in the first half of 2021.
Despite its underlying strength, the flow of new buyers into the housing market is slowing as is typical at this time of year. Demand for homes is still 40% higher than it was in 2019, but it has slowed back to pre-Covid levels of early March. That said, house price growth is expected to increase further towards 4% over the next two to three months.
Zoopla data shows that most new sales agreed in the final quarter of a normal year will complete by 31st March the following year. However, 54% of sales agreed in January will complete by the end of the first quarter, falling to less than a fifth in February. For prospective buyers hoping to enter the market in early 2021 with the intention of beating the stamp duty deadline, it is likely that just a quarter of sales will complete in time.
Richard Donnell, research and insight director at Zoopla, said: “Levels of housing market activity are slowly becoming less frantic as we approach the year end. There is a sizable pipeline of business for the property, lending and conveyancing industry to convert into completed sales before Christmas and into Q1 2021. The stamp duty deadline will focus the minds of committed movers in the near term, which will support sales volumes and make for a strong first quarter of sales completions in 2021.
“Those who leave it to January to start their search for a home will be cutting it fine - just half of sales agreed in January will convert into a completed sale by the end of March so those looking to beat the stamp duty deadline will need to be well prepared. Finding an agent before Christmas and instructing a conveyancer to prepare all the sellers legal information will be essential to boosting the chances of saving up to £15,000.
“House price growth continues to move higher as the weight of demand pushes the growth rate upwards and we expect prices to be 4% higher by the end of 2020. However, the strength of the market nationally is masking weakness in parts of the market where sales are slowing in areas where households are typically on lower incomes and more sensitive to economic uncertainty and more restricted credit availability. This market polarisation is set to become a growing feature of the market as we move into 2021.”
