The demand for UK property was 40 per cent higher in 2020 than it had been in 2019, the brand new Zoopla House Price Index reveals. The much-reported housing boom took property experts and buyers and sellers alike, with strong house price growth recorded every month since the reopening of the housing market in June, with the highest annual increase of 3.9 per cent recorded in November 2020.
Although the demand for housing was beginning to decrease a little by the end of November as Christmas holidays were edging closer, but it was still a massive 33 per cent higher than same time a year ago.
However, while overall demand for property in 2020 went up 40 per cent, the supply of new property listings to the market increased by a meagre four per cent. This supply-demand imbalance is the real reason behind the so-called property boom. This really is why house prices have shot up, and why house buyers have paid an additional £62bn in sales in 2020 – a 26 per cent increase on 2019. There simply isn't enough housing to go around, and that's what pushing house prices up.
Having said that, the much more so than the much talked-about shift in buyer's priorities – that is, their perceived willingness to pay more for larger homes with gardens – is confirmed by house purchase evidence. The prices of larger homes have gone up at double the rate of prices for flats, and flats are selling better if they offer private outside space.
When will things go back to 'normal'? Not any time soon, as it now appears. Never mind the end of the stamp duty holiday; now that we're all likely to remain in some form of lockdown for many more months, some people will continue to look for better housing to make working from home more comfortable. Richard Donnell Research and Insight Director at Zoopla, comments:
'As we approach the final two weeks of the year, housing market activity is slowing but remains unseasonably strong. The ‘'once in a lifetime reassessment of housing’' kick-started by the pandemic has further to run in our view. As households look to the future, and with no immediate end in sight to restrictions, a proportion will continue to re-assess their housing priorities.
'Stamp duty is a factor supporting demand, but we have questioned the scale of the importance. A recent consumer survey by Zoopla found that 44 per cent of movers’ plans were not influenced by the stamp duty holiday -they remain focused on the need to relocate and find more space and a better location.
'We expect a seasonally strong start to 2021 with older, equity rich, long-time owning households continuing to take a growing share of sales. Improved availability of higher loan to value mortgages for those with deposits of 10% or more are already increasing which will support first time buyers in 2021.'