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Slowing demand for housing remains third higher than a year ago

Demand for housing is a third higher than a year ago although it has been slowing since the start of the stamp duty holiday.

With the end of lockdown demand for housing from home movers and first time buyers increased significantly according to Zoopla and remains 34% higher than a year ago.

The stamp duty holiday introduced in the summer has kept demand high as buyer need to complete before March 2021, sharply dipping when the November lockdown was announced and recovered again.

Property sales agreed are 38% higher than last year and UK house prices are near a three year high averaging £223,500 with the top Zoopla top 20 city index average at £259,200.

Sales pipeline 50% more than last year

The number of sales in the pipeline are 50% more than this time a year ago and are expected to translate to 1.1 million housing transactions in the UK for 2020.

This will be only 6% the number of transactions in 2019 and helped by second steppers as first time buyers are struggling to find the deposit as lenders lower the maximum loan to values (LTV) to 85%.

The table from Zoopla is the leading ten city house prices and growth over the year to October 2020.
City Current price Annual growth
Nottingham £164,000 5.3%
Manchester £178,400 5.2%
Leeds £174,400 4.9%
Liverpool £126,000 4.5%
Leicester £188,700 3.9%
Sheffield £142,600 3.8%
Cardiff £215,100 3.8%
Birmingham £172,000 3.7%
Bristol £287,000 3.4%
Edinburgh £233,600 3.2%
UK house price growth is an average of 3.5% year-to-year compared to 1.2% a year ago with strong growth in Nottingham up 5.3% and Manchester higher by 5.2%.

House prices have been kept high due to strong demand, a change of the types of homes on the market with more expensive homes for sale at higher prices.

These higher property values can benefit buy-to-let landlords as they can increase existing mortgages to raise funds to purchase another property.

In London and the Southern England sales have recovered faster than the rest of the country from a lower base and competitions are expected to be 7% higher than last year.

Market lacks sales volumes and liquidity

The housing market has seen sales volumes remain at 1.1m to 1.2m compared to the financial crisis of 2008 at 0.9m and in 2019 sales were -6% lower than levels in 2016.

Sales volumes in 2019 for London were -30% lower and the South East -20% lower than 2015 due to changes in tax and tighter mortgage regulations.

In 2021 Zoopla expects sales of houses to be 4.5% of all private homes compared to the 60-year average of 7% and a high of 12% in 1988.

See how much your monthly mortgage interest payments would be for buying a more expensive property at this link:
Mortgage cost calculator with instant results and figures for your new home

There is a lack of liquidity in the market due to a variety of reasons such as changing demographics of an aging population with older single person households.

There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing by using a lifetime mortgage accessing cash to improve your quality of life or pay university fees for grandchildren.

Rather than moving, the remortgage buyer could release capital for an extension or loft conversion for more space when they work from home and increase the value to their property as well.

Zoopla expects house prices to rise at a slower rate of 1.0% in 2021 due to weaker demand, end of the stamp duty holiday, outcome of Brexit and Covid vaccine with sales volumes 20-30% lower than normal levels.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost-effective mortgage deal or are a buy-to-let investor.

Learn more by using the mortgage cost calculators, equity release mortgage calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers use the lifetime mortgage quote and our London City Mortgage brokers can recommend the leading providers allowing you to receive cash from your property to help maintain your standard of living as costs rise.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

The latest mortgage news


26 Feb 2021

Stamp duty holiday extension likely as 100,000 buyers will miss deadline

About 100,000 buyers already agreed to complete will miss the stamp duty holiday deadline leading many to expect an extension.

08 Feb 2021

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04 Feb 2021

Stronger demand from buyers sends house prices higher

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29 Jan 2021

Recovery for equity release with low cost mortgages and pent-up demand

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