Sellers re-entering the market are taking a bullish approach and pricing their properties higher, according to Home.co.uk.
The property website says vendors are showing considerable confidence and less caution than might be expected due to the impact of the Covid-19 pandemic.
There remained, however, an overall supply shortage in May, with just 40% of the new listings usually expected following the market’s reopening on May 13.
Home says that bullish sellers are justified as there has been a huge release of pent-up demand post-lockdown, demonstrated by several lenders’ decisions to temporarily withdraw 90% Loan-to-Value (LTV) mortgage products.
It predicts a further two to three months before the market finds its new ‘post-pandemic equilibrium’. A return to the positive trends witnessed before the pandemic took hold would be an optimistic scenario, according to the property website.
It says soaring demand will be tempered by a mortgage credit bottleneck and the economic damage caused by the lockdown measures, which cannot be ignored.
Home adds that the key question at the moment revolves around how vigorous the rebound will be, with indications so far that the market has taken off ‘with an unprecedented sense of urgency’.
Home.co.uk’s June Asking Price Index – findings at a glance:
– Supply of new sales instructions ticks up across the UK in May (but is only 43% of the May 2019 total) as the lockdown eases.
– The North West and Yorkshire show confident price hikes of 1.5% and 1.3% respectively since last month.
– The supply rate of new instructions has recovered the most in London and the least in Scotland.
– The best-performing regions, the North West and Yorkshire, show the lowest rises in Typical Time on Market aside from London and have year-on-year price growth comfortably surpassing monetary inflation (3.4% and 3.2% respectively).
– The total sales stock on the market across England and Wales has increased slightly since last month but is still significantly down; 14% year-on-year.
– The East of England remains the UK’s worst-performing region with the average asking price 1.7% lower than 12 months ago, although a jump of 0.9% this month shows that confidence is returning.
– Supply in the rental sector across the UK recovers slightly but remains 15% down year-on-year.
This post has originally been featured in Property Investor Today.