High demand for prime property leads market rebound
High demand for so-called prime property has led the UK housing market’s post-lockdown rebound, new data from estate agents Knight Frank revealed today.
Since markets reopened in mid-May, the UK market has surged back at a surprisingly swift pace due to the release of a tide of pent-up demand.
According to the research, the biggest increase in deals agreed since lockdown ended has taken place in the prime market, which comprises the most expensive property.
A quicker recovery here tallies with a similar trend which took place during the period that followed the global financial crisis, Knight Frank said.
As of the week ending 16 August, the number of sales subject to contract for properties valued over £1m was up 100 per cent year on year, according to Rightmove.
The figure was even higher for property priced between £750,000 and £1m, which jumped by 118 per cent.
By contrast, the number of offers accepted for properties valued up to £500,000 was only 53 per cent higher.
Overall, analysis of total sales subject to contract on Rightmove showed a jump of 61 per cent jump with the same week last year.
According to Knight Frank’s own data, the number of sales in the capital was up 68 per cent year-on-year, while for the country as a whole it was up a whopping 158 per cent.
Oliver Knight, head of residential development research at Knight Frank said: “Such a strong rebound reflects the ongoing release of pent-up demand following lockdown, coupled with the recent cut to stamp duty.”
He added: “It is also likely that there are wider behavioural shifts in play, as people reassess their housing needs – the ‘escape to the country’ narrative is one that has been covered in detail.”
In July, chancellor Rishi Sunak announced a stamp duty “holiday” as part of his summer statement, instantly raising the threshold at which people pay the stamp duty property tax to £500,000 from £125,000.
As a result of the tax cut, which will run until the end of March next year, UK house prices jumped back last month, after tumbling in June.