Ups and Downs in Residential Property

Conflicting messages on the current state of the residential property market have emerged in the last few days. On May 27th Rightmove, Britain’s biggest internet-based residential property agency, reported more than 6 million visits to its website. This was an 18% increase on the same day last year and the highest daily figure since the business was launched in 2000. A few days earlier the company also claimed a record for the longest amount of time the average viewer spent on the site.

Miles Shipside, Rightmove’s Commercial Director put the surge in interest down to “the combination of pent-up demand being released, new property entering the market, and no half-term holidays during lock down…” Around 400,000 property transactions had been put on hold during the restrictions, amounting to £82 billion in sales, and the market had fallen by 90% compared with figures for 2019. Rightmove said that coastal areas including Cornwall, Devon and Hampshire had seen an upsurge in inquiries, along with towns and cities in northern England such as Manchester, Wigan and Warrington.

A survey conducted by Rightmove found an increase of 25% in the number of people now entering the market, who prior to the lockdown had not planned to move. Miles Shipside commented: “Areas with beautiful scenery and a potentially quieter life are proving to be popular as home-movers’ priorities start to shift and outside space becomes more important.”

However, in contrast to this positive view Nationwide Building Society has revealed a fall of 1.7% in house prices during May, the biggest monthly drop in 11 years. This contributed to the halving of the annual rate of house price increase from 3.7% to 1.8% over the last twelve months. Nationwide acknowledged that prior to the pandemic striking, the housing market had been gathering momentum following the uncertainties over Brexit and the General Election. The stable labour market and low borrowing costs had also helped to get property transactions off to a good start in early 2020. Nationwide’s research showed that 12% of people had put off thoughts of moving because of the lock down, although the majority of respondents thought that prospects would improve over the next six months.

It is hard to know what to make of this recent research into the residential property market, since even the experts can’t always agree. Eventually the market will decide for itself which way it is headed, and people will continue to downsize or upsize, re-locate for work or better schools, retire to the countryside or take their first steps onto the housing ladder, just like they have always done.

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