The pandemic has cut the supply of homes coming on to the UK market in 2021, as a surge in coronavirus cases discouraged potential sellers in spite of the stimulus of a stamp duty holiday.
The new stock of homes coming on to the market in the first two weeks of 2021 has fallen by 12 per cent compared with the same period in January 2020, according to property website Zoopla, which ascribed the fall in part to the reluctance of potential sellers to risks viewings in the current pandemic surge. Daily Covid-19 cases topped 60,000 in early January, though the number has fallen sharply in recent daily figures.
“Record Covid cases and calls to uphold social distancing appear to have made some would-be home sellers reluctant to list their property for sale at present,” Zoopla said, adding that the strength of last year’s market may also have “soaked up” the supply of homes available for sale.
Richard Donnell, research director at Zoopla, said valuations were continuing, but sellers were more nervous about viewings, while estate agents were tightening procedures to track clients and their contacts in the event of a positive test.
Agents surveyed in the latest market report by the Royal Institution of Surveyors, published in mid-January, said they expected lockdown to put the brakes on activity in the market, with fewer buyers keen to travel and sellers taking a “wait and see” approach.
The decline is backed up by figures from TwentyCi, a consultancy, which found the number of new instructions in the first week of the year was 15.5 per cent lower than in the same period in 2020 and nearly 30 per cent down on 2019. The number of sales agreed — an indicator of demand — was up 15.7 per cent on 2020 — reflecting the recent surge in activity as buyers try to complete before March 31, when a nine-month stamp duty holiday saving them up to £15,000 is due to end.
The lack of new instructions was keeping prices high, Zoopla found, with growth rates at a 10-year high in three northern English regions — the Northeast, Northwest, and Yorkshire and the Humber. Prices in Liverpool were growing at 6.3 per cent — the fastest rate for 15 years.
Yet in London the situation was reversed. It was the only region to show an increase in new listings, with a rise of 11.6 per cent compared with the first two weeks of 2020. This was made up largely of flats, explained by the trend to trade up to larger homes and buy-to-let investors selling up in advance of mooted tax changes, Mr Donnell said. Among the regions, price rises were lowest across London and the Southeast.
The search for more space was a prominent feature of the 2020 property market, and remains a factor for many homeowners, Mr Donnell said, pointing to a recent Zoopla survey of 4,000 homeowners. “Half said Covid had created a desire for them to move and change their housing arrangements.”
The rush to complete to take advantage of the stamp duty holiday is likely to mean many of those agreeing sales now will be unable to hit the deadline: “In a normal year, around 55 per cent of sales agreed in January would complete by the end of the first quarter. The proportion this year is likely to be lower,” Zoopla said, estimating that up to 70,000 sales agreed in 2020 risked missing the deadline.