The UK’s second lockdown restrictions may provide an unexpected boost for the housing market, as parts of the conveyancing system struggle under the pressure of high volumes of transactions.
Knight Frank research showed that the number of viewings that took place between Monday and Thursday last week was 15% lower than the previous week. However, the number of valuation appraisals was 38% higher over the same period.
Tom Bill, head of UK residential research at Knight Frank said: “The timing of the lockdown is somewhat ironic because it comes as many are warning that parts of the conveyancing system are struggling to cope with the current volume of transactions.
“That fact is unlikely to change and some parts of the system may come under more strain during this second lockdown.”
Exchanges were also 11% higher between Monday and Thursday last week, reflecting the trend highlighted last month of how the number of exchanges continues to grow on the back of high numbers of deals going under offer in recent months.
The early days of the second national lockdown are bearing little resemblance to that of the first, according to Knight Frank. Agents have remained open and the high volume of transactions agreed since the market re-started in May will continue to progress.
However, a number of things have shifted. Knight Frank said that some agents have said their diary became quieter after the lockdown was announced. Part of that was caused by some initial confusion around whether the property market was remaining open, which it is.
Some buyers and sellers are understandably taking extra precautions and delaying decisions.
Other agents have not noticed a major change in the first week and some have reported a stronger resolve to act.
The current lockdown has accelerated trends which began during the first, the estate agent said.
“This has only reinforced the desire for more space,” said Craig Walters, head of lettings for Knight Frank in Belsize Park. “Three tenants all called to serve notice on Friday and when I asked why, they all said they needed more space to work from home.”
The number of exchanges in prime London markets reached its highest level in five years last month as more deals began coming to fruition. It is also true that most exchanges still relate to deals that pre-date the first lockdown.
Knight Frank predicts the second lockdown will mean a smaller dent in the UK housing market than the first.
As with other markets, two factors will define the path of the housing market in months to come: the emergence of a COVID-19 vaccine, and the avoidance of a no-deal Brexit.
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