UK Property Market Outlook: Week Beginning 21 December
Despite the eight-week shutdown, many indicators of activity in the UK property market during 2020 were stronger than in recent years
3 minutes to read
It has been a year of extremes for the UK property market.
Demand in London surged in the early weeks of 2020 following the decisive general election result. It appeared a traditional London-led recovery was under way as buyers and sellers tuned out Brexit risks.
Then, following an eight-week shutdown due to the pandemic, demand in suburban and country markets was ignited as buyers looked for more space.
Now, in the final weeks of the year, Brexit is vying with the end of the furlough scheme as the biggest risk facing buyers and sellers.
So, what state is the market in as we head into 2021? What did 2020 ultimately look like when we combine these periods of robust activity, uncertainty and a complete market shutdown?
To answer that question, below is a list of key milestones for a series of indicators.
They are the dates on which the total in 2020 reached the full-year average for the previous five years. For example, if the average was 100 between 2015 and 2019, the date in 2020 marks the point at which 100 was reached.
What the numbers reveal is that despite the shutdown, many indicators of activity in 2020 were markedly ahead of recent years.
We have included examples of local areas that were ahead of each trend.
28 September 2020 – New prospective buyers
The date on which the number of new prospective buyers in the UK reached the five-year average came in late September. While demand for country living has been a key trend in 2020, it was London that led the way for new buyers thanks to a surge in the first two months of the year following the general election. London hit the five-year milestone on 7 September while the country market caught up a month later.
Ahead of trend:
Wandsworth: 18 June 2020
Esher: 23 June 2020
21 October 2020 – Offers Accepted
The number of offers accepted in UK markets surpassed the five-year average towards the end of October. This indicator that has remained consistently high since the market re-opened, as we explored here. In the country, the milestone was reached on 9 October and a month later in London on 13 November. This in-built momentum will support the number of exchanges into 2021.
Ahead of trend:
Dulwich: 23 July 2020
Exeter: 29 July 2020
28 October 2020 – Market valuation appraisals
The number of market valuation appraisals in London caught up with the five-year average at the end of October. In country markets, the figure for 2020 still trails the five-year average. This underlines the strength of supply from London-based sellers looking to move outside the capital, often while simultaneously down-sizing in London. A year ago, 70% of London-based buyers were looking in the capital, a figure that has now fallen to just under half.
Ahead of trend:
Kensington: 14 September 2020
Cobham: 21 September 2020
21 November 2020 - Viewings
While the supply of new London properties for sale has grown more strongly than in the country, the reverse is true for viewings. London has yet to match the five-year average for viewings whereas markets outside the capital did so towards the end of November. This reflects how prospective buyers have typically been more confident viewing the types of property found in the country due to Covid-19 restrictions. The high number of viewings in Harrogate reflects a trend analysed here.
Ahead of trend:
Harrogate: 21 August 2020
Queen’s Park: 18 September 2020
14 December 2020 - Exchanges
Despite the disruption caused by an eight-week shut-down, the number of exchanges that took place in markets outside of London had caught up with the five-year average by the middle of December. While leading indicators such “offers accepted” have been high since the market re-opened in May, the fact that the number of exchanges will end 2020 above the five-year average underlines how strong the “escape the country” dynamic has been.
Despite a strong start to the year in January and February, the equivalent figure for London in mid-December was still 11% below the five-year average.
Ahead of trend:
Tunbridge Wells: 22 September 2020
Fulham: 16 October 2020