Six months ago, economists were forecasting a difficult housing market with a collapse in demand and price falls in the double digits. In any previous recession they would 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 -
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.
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 -
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.