Property transactions worth a total of £82bn are on pause due to the coronavirus lockdown, a report from Zoopla has found.
The housing market was effectively suspended by the government in reaction to the Covid-19 outbreak, with 373,000 transactions in limbo, the latest UK Cities House Price Index says.
The sales impacted were agreed between November 2019 and February 2020 and would have completed between April and June had the market not been on hold.
The report finds that, aside from the 373,000 sales suspended in the pipeline – which may complete later in the year – a handful of sales are still being progressed earlier in the process – with deals being struck Sold Subject to Contract, largely based on viewings and progression of sales that took place ahead of the lockdown.
Zoopla says new sales agreed are currently running at a tenth of the levels recorded in early March.
The rate of fall-throughs peaked on 23 March, the day of the lockdown, and has fallen back as the volume of new sales being agreed declines.
However, the drop in demand was found to have bottomed out in early April and has since started to improve slowly.
Regionally, the drop in demand as a result of Covid-19 was up to 80 per cent in Cardiff, while Newcastle registered a lower drop in demand (48 per cent) where market conditions were already weaker.
Over the last two weeks, demand for housing in cities across northern England has rebounded more strongly – notably in Manchester, Liverpool and Leeds. These are all cities where 2020 started strongly and where housing affordability remains attractive, and where we could see a faster bounce-back when restrictions lift.
By contrast, higher value cities such as Cambridge, Edinburgh and Southampton have not yet recorded any material improvement in demand over the last few weeks. There are still low levels of demand but a limited improvement so far.
Zoopla director of research and insight Richard Donnell says: “There is a two speed housing market at present. Parts of the market are at a virtual standstill as a result of the physical restrictions that have stopped new supply coming to the market and the viewing of homes for sale. However, the online browsing of homes for sale and buyers expressing interest in property have been rising off a low base over the last two-three weeks.
“Demand for housing is still 60 per cent lower than at the start of March, but we expect interest in housing to continue to improve slowly. Northern cities have seen the strongest improvement in underlying demand although levels remain half those at the start of the crisis.
“Without doubt, once the coronavirus restrictions are relaxed, we should expect the release of demand that has been building since Brexit and political uncertainty destabilised market sentiment. That said, the case for a stamp duty holiday to support a resumption of market activity is clear and a high proportion of savings are likely to be spent, further stimulating economic activity.
“We expect completed housing sales in 2019 to be half of those in 2020, having lost close to two full months of market activity by mid-May, and taking into account time for agents to rebuild sales pipelines.”