Rightmove says that the rulebook has been rewritten as the post-lockdown mini-boom accelerates rather than slows down.
There is normally a seasonal slowdown in housing market activity over the summer months, as both buyers and sellers turn their attention to summer holidays.
But this year, home movers have put more property on the market and have agreed more sales than in any month for over ten years, worth a record total of over £37 billion.
This is leading to monthly price increases in ten out of twelve regions, with a record high in new seller asking prices in seven of those regions.
Prices usually fall at this time of year, as sellers try to tempt holiday distracted buyers, with the national average monthly fall for the last ten years being 1.2%.
While there is a slight monthly fall of 0.2% (-£768), this is due to London’s more normal seasonal fall of 2.0%, reversing what would otherwise have been an unseasonal national rise.
Miles Shipside, Rightmove director and housing market analyst said:
“There have been many changes as a result of the unprecedented pandemic, and these include a rewriting of the previously predictable seasonal rulebook for housing market activity and prices. Rather than just a release of existing pent-up demand due to the suspension of the housing market during lockdown, there’s an added layer of additional demand due to people’s changed housing priorities after the experience of lockdown.”
“The number of monthly sales agreed is the highest that we have ever measured since we started tracking this figure ten years ago, up by 38% on the prior year, and a massive 20% higher than the previous record set in March 2017.
“The increase in activity is not just a result of the stamp duty holiday, as sales agreed are up across all sectors of the market. They’re up 29% in the first-time buyer sector, 38% in the second stepper sector and 59% for larger, top of the ladder homes.
“Momentum is still building, with the latest weekly figure for the number of sales agreed having shot up by 60% compared to the same week a year ago.
“As part of the virtuous home moving circle, home-owners are bringing more properties to market than in any month since 2008, giving more choice to buyers.
“There are 44% more properties coming to market compared to the same period a year ago, though there are considerable regional variations.”
Record levels of pent-up and new buyer demand mean that there is extra pressure on the lending and legal areas of the home moving process.
The average time between agreeing a sale and moving in was already around three months before lockdown and now there is a ten-year high in the number of sales being agreed.
Mortgage lenders and conveyancers may struggle to cope with the increased workload, not only now but as pressure rises further in the run up to the 31st March stamp duty holiday deadline.
“Not only are we seeing an unusually busy summer period, but also parts of the lending and legal sectors are having to cope with capacity constraints, as some staff will still be on furlough while many will still be working from home.
“Patience will be required, especially with some lenders limiting their product ranges due to capacity constraints in their ability to process mortgages. To minimise the risk of missing the 31st March stamp duty deadline it’s best to plan well ahead.
“This busy pace of the market looks set to continue in the short term, and although the market has proven resilient since reopening we still need to be mindful of the wider economic concerns as the year progresses.”