Property market round-up - September 2020

Six months ago, some economists were forecasting a difficult housing market with a collapse in demand and price falls in the double digits. In any previous recession they might have been right. Not this time, with activity strong and prices 5% higher than a year ago.

A month ago, we described the market as 'defying gravity'. Demand was on the up. New sellers were listing their properties and rental demand continued to be strong. Activity was being supported by government intervention and a reassessment of housing needs as a result of experiences in lockdown. These same factors have continued to drive the market into September

The big picture - prices up 5% year-on-year

According to Nationwide Building Society -

• Annual price growth picked up to 5.0% in September, the highest rate since Sep 2016
• Prices rose 0.9% month-on-month, after taking account of seasonal factors
• Most regions saw a pickup in house price growth rates in Q3

	September 20	September 19
Monthly Change	0.9%	2.0%
Annual Change	5.0%	3.7%
Average Price*	£226,129	£224,123

Source - Nationwide    *not seasonally adjusted

The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing. The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.

​Robert Gardiner, Chief Economist, Nationwide

The regional cities

The Zoopla/Hometrack UK Cities index is a month behind Nationwide's report and supports their August figures, with the UK's largest cities recording an average annual increase of 2.6% year-on-year.

​Once again, the North dominates. The strongest performers -

	Average Price	Aug 20 y-o-y	Aug 19 y-o-y
Nottingham	£159,100	​4.7%	3.0%
Manchester	£174,900	4.2%	3.6%
Leeds	£170,700	3.9%	2.7%
Edinburgh	£229,600	3.7%	3.5%
Leicester	£183,900	3.6%	4.3%
Liverpool	£123,400	3.4%	3.2%

Source - Zoopla House Price Index

The impetus for price rises shows no signs of slowing as new buyers continue to enter the market. Since the start of the year, demand for housing is 39% higher than at this stage last year.

More buyers also bring more supply to the market and available sales inventory is 10% higher than a year ago. Greater supply increases choice for buyers and will keep the rate of house price inflation in check.

The strength of the recovery so far is highlighted in new sales agreed which over the last 9 months are 3% higher than over the same period last year and this with a 50-90 day closure of the housing market.

Zoopla