Real estate website Rightmove announced that pledged sales reached £ 37 billion in July, making it the busiest month for home sales in ten years. It’s £ 12 billion more than in July 2019 when sales hit £ 25 billion.
Unsurprisingly, home purchases fell during the lockdown, but when viewing and moving were allowed again in May, they picked up again.
The government’s decision to lower the stamp duty may have encouraged both buyers and sellers to act quickly. Their decision, announced in July, makes real estate £ 500,000 and below zero stamp duty.
Some of those savings are passed on, but house prices are not significantly lower than last year. Rightmove data showed that the average asking price in August was £ 319,497, a 0.2% decrease from the record high of £ 320,265 in July.
National median property prices have been tempered by a 2% drop in asking prices in London, but Rightmove reports record prices have been recorded in Scotland, Wales, Yorkshire and Humber, North West England, the East Midlands, West Midlands and East England.
July is usually one of the quieter times of the year because when people go away for the summer holidays they don’t think about moving, but the last month has been extraordinarily busy for moving companies across the UK.
In fact, buyers and sellers rewritten the real estate market rulebook this summer as more people move home than ever before.
In fact, Rightmove agreed upon £ 37 billion worth of property sales in July – the busiest month for home purchases since we started tracking that data over a decade ago. Sales increased 60% between August 5th and 12th compared to 2019.
Miles Shipside, a Rightmove director, said:
“We associate this time of year with pool immersion rather than the property market and sand and sun rather than brick and mortar, but buyers have been on a £ 37bn monthly spending spree.”
He also said:
There have been many changes as a result of the unprecedented pandemic, including a revision of the previously foreseeable seasonal set of rules governing the activity and prices of the property market
Home movers are marketing and buying more properties than we saw in the previous month in over a decade, helping to bring prices up to the all-time high in seven regions.
Instead of just releasing the existing pent-up demand due to the suspension of the housing market during the lockdown, there is additional additional demand due to people’s changed priorities after the lockdown.
This also maintains the momentum of the unexpected mini-boom, which is now going longer and faster. We associate this time of year with soaking in the pool rather than the property market and more sand and sun than brick and mortar.
While these unusual all-time highs for new sellers asking for prices in seven regions, as rural locations become more popular are driving prices up in places like Devon and Cornwall, such unprecedented buyer activity can lead to processing delays and mean that You need this to be patient in order to come to completion.
Rightmove’s data headings
- July 2020 agreed the highest number of sales in a month in more than ten years, with a record over £ 37 billion
- The sales agreed for July 2020 have increased by 38% compared to 2019 and are thus a massive 20% above the previous record of March 2017
- The last agreed weekly sales increased by 60% compared to the same week in 2019
- The highest number of properties launched in a month since March 2008, and 44% more properties come onto the market than in the same period last year, although there are significant regional differences
- Unusual record high for new sellers charging prices in seven regions, but London slashes national average to a 0.2% drop due to its typical seasonal 2.0% monthly drop
Miles Shipside went on to explain that real estate in typical commuter areas now has to offer more than just being close to a train station.
He said: “There are more properties on the market in all regions than a year ago, and at the national level, the new supply and increased demand appear to be relatively balanced. However, those with the greatest desire to go are not surprising in London and its commuter belt.
In London, 69% more properties are coming onto the market, the Southeast 60% and the East 56%. With work and transportation patterns potentially changing the most in the capital, commuter belt properties need to be more appealing to potential buyers than just being close to a train station.
Many buyers seem to be meeting their new needs in these regions, as the number of agreed sales is also at record levels. The out-of-town exodus has helped prices rise to record levels in Devon and Cornwall, where working from home, for example, means a different lifestyle that is much closer to your new front door.
What do real estate agents say?
Kevin Shaw, executive director of residential real estate sales for Leaders Romans Group (LRG) said:
This is positive news for both the real estate sector and the wider economy. The market performed well in the first quarter of this year and has picked up again since the lockdown restrictions were lifted. The demand for pent-up purchases is a key factor in this post-lockdown emergence, as is increased demand for housing and gardens. As many of us continue to work from home, people have realized that this is where business can work well and no longer want to commute to big cities five days a week or live in urban environments closer to offices.
There is a real demand for rural areas with green spaces. The recently announced stamp duty holiday is also another market accelerator as many investors and buyers take advantage of the savings that are to be made. We have also seen an increase in inventory – the growing supply gives buyers more choices. These numbers are extremely positive, but should not lead to a sustained price boom.
Dominic Murphy, Managing Director of DM & Co. Estate Agents in Solihull added:
The market is showing incredible signs of resilience after the lockdown. The Chancellor’s announcement certainly contributed to this recovery, and the market is more active now than it has been for the past decade. July 2020 was the best month in the history of DM & Co ..
We are seeing increased activity across all price ranges and expect this to continue well into the fourth quarter as buyers will do everything in their power to enforce sales before the stamp tax vacation ends.
I suspect the market will remain buoyant until the job losses take hold and the market really hits its mark and mortgage eligibility is called into question. If you can find yourself in a chained position, you are most likely taking advantage of the momentum the market is seeing and not being open to chains breaking further down.
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