More sales at higher prices have boosted the value of homes selling in 2020 – with 2021 forecast to be just as busy for property sales.
Zoopla’s House Price Index reports 40% more demand for housing than in 2019, despite the two-month shut-down.
The greatest increase in property sales agreed was concentrated in the South East and Eastern England, up 20% on last year, and up 9% nationally.
Higher price points meant the value of homes sold went up 26% this year – worth an extra £62 billion – taking the annual total to more than £300bn.
According to Zoopla, this has been driven by a change in lifestyle aspirations as well as the stamp duty holiday; the fundamental search for more space has resulted in the average rate of price growth for houses (4.3%) running at double the rate of growth for flats (1.8%).
It reports national house price growth is running at a three-year high of 3.9%, the highest since August 2017 and up from just 1.3% a year ago.
Manchester (5.7%) followed by Leeds, Nottingham and Liverpool are recording the fastest growth, but affordability issues have led to slower growth in southern cities such as Southampton and Oxford (2.1%).
While demand is up, the flow of new supply has increased by just 4%, creating an imbalance and an upward pressure on prices.
Richard Donnell, director of research & insight at Zoopla (pictured), says the housing market is ending 2020 strongly, with more buyers looking for a home than this time last year. “Looking ahead to 2021…we expect the number of completed housing transactions to match 2020 levels at 1.1m,” he says.
Donnell adds that the ‘once in a lifetime re-assessment of housing’ kick-started by the pandemic has further to run. “With a long Christmas weekend, and many households isolating in smaller groups, we expect interest in housing to be stronger than usual ahead of the traditional Boxing Day bounce when interest in housing jumps and the next tranche of would-be buyers.”