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Asking Prices for Properties up £6,000 on Pre-Lockdown Averages

Lockdown has taken its toll on the UKs housing market, but evidence would suggest things are gradually returning to normal, at least in terms of property values which are heading in the right direction following an extensive period of stagnation.

According to the latest figures released by Rightmove, which is the UKs leading online property portal, average house prices in England are up £6,000 on their pre-lockdown averages.  These numbers suggest that the “flood of pent-up demand” predicted to hit the market as lockdown restrictions are eased, may already be underway.

Hundreds of thousands of property transactions are known to have been put on hold during lockdown and as of only a few of weeks ago these sales were once again allowed to proceed by the UK government.

An Unprecedented Though Expected Rush

Rightmove has noted that contact requests and general activity among buyers and sellers not only improved but actually surpassed all previous daily records, when the market officially reopened.

“The surprise reopening of the market with only a few hours’ notice meant many estate agents were not ready for the sudden rush of buyers,” the property portal reported.

Rightmove also stated that the ten busiest days in the history of its website were recorded during May and June of 2020, with a cumulative on-page time of nearly 1 million hours on June 6 alone.

Helped by pent-up demand, sellers are gradually pushing average property prices upwards in key areas across the UK.  This week, the average property price is approximately £6,000 higher than it was at the beginning of lockdown which is an increase of approximately 1.9%.

The government had previously prohibited all house moves that were not considered essential, only allowing non-essential property transactions to take place as recently as mid-May.

Asking Prices Predominantly Paid

Another interesting finding from the report was that Rightmove revealed that a surprising proportion of buyers are demonstrating willingness to pay almost full prices. Even in the midst of a period of economic uncertainty, the average homebuyer in June is negotiating a 2.3% discount which is much better than the 3.4% recorded in February, prior to the lockdown. Find out how much a mortgage would cost you using our UK mortgage calculator.

“England is getting moving again,” Rightmove reported.

“There are no signs of panic selling or even a price dip. On this evidence buyers may now be trying to exchange quickly.”

Rightmove also confirmed a change in priority for the average UK home buyer, as homes with gardens now accounting for more property searches than ever before and previous best performers such as studio flats and apartments have now fallen completely out of the top five.

Rightmove and other industry experts are advising would-be buyers and sellers to take advantage of the current situation.

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Other Finance News

UK Property Market Could Benefit from ‘Blockchain’ Style Platform

A software start-up in the UK has suggested that the speed of property sales nationwide could be doubled with the introduction of a new blockchain-style platform. Coadjute, the company behind the proposed ‘proptech’ platform, announced a deal this week that could put the software into increased use in the future.

If the initiative goes ahead over half of all estate agents in the UK would gain access to a new platform designed to accelerate property sales by addressing delays and inefficiencies.

Coadjute chief executive Dan Salmons told Yahoo Finance UK that a simple lack of streamlined data-sharing and real-time communication between people involved in property sales and purchases is the main reason transactions often take months to complete.

The company believes that its new platform could clear up confusion throughout all stages of the sale process, making it quick and easy to access important information. It would also eliminate unnecessary paperwork from the equation for both buyers and sellers.

Coadjute has stated that the UK government is on board with the idea, having indicated its enthusiasm about blockchain-style systems and similar platforms for the property industry.

Instant Access to Essential Information

The new system could potentially transform the way those involved in property transactions go about their business. The platform would serve as a centralized hub for storing, using and updating essential information in real-time, connecting lenders, estate agents, sellers, buyers, government offices etc.

Rather than having to reach out to third parties (as is often the case now), all the information needed to proceed to the next step in the transaction would be accessible in real-time.

According to Coadjute, this is far from the first time the industry has been presented with the idea of unifying its data access and management protocols with a single software platform. All previous attempts have failed due to the difficulties involved in creating a platform all parties are happy with in terms of user-friendliness and safety.

In addition, many are simply reluctant to switch from traditional manual processes to a system of centralized and automated data processing.

An Alternative Approach

What gives Coadjute’s the edge in its proposal is the way it eliminates the requirement for the parties involved to sign up to a single IT system. Instead, estate agents and other parties would be able to continue using their own software and follow their own Data Storage and security practices.

They would simply connect to a shared centralized data hub, which would contain all the information that would normally be needed to be sourced manually. Actions and activities would be tracked, in order to let those accessing the data to note important changes, along with when they occurred and who implemented them.

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Coronavirus

Rental Sector Thrives During Lockdown due to Job Losses, Break-Ups

While Britain’s housing market sales have experienced a slowdown during lockdown, the private rentals sector has been buzzing with activity. In fact, the latest report from Rightmove suggests that demand for lettings across the UK is currently 22% higher than it was at the same time in 2019.

As lockdown restrictions are gradually eased, the pent-up tension and aggression of frustrated movers is making its mark on the sector. Such is the demand for rental properties that experts believe inventory will be reduced quickly, possibly leading to a surge in the average monthly rent prices in key areas.

Interest in all types of rental properties initially plummeted when lockdown was first enforced, though has skyrocketed since. Experts have cited job losses, relationship breakdowns and the simple desire to change their surroundings as key reasons for renters in record numbers looking to relocate.

An Influx of Interest

In stark contrast to the huge fall in visitor numbers seen towards the beginning of lockdown, Rightmove reported the busiest ever day in the history of its website on Wednesday, May 27, 2020.  Six million people visited the online property portal, of which a sizeable proportion were on the lookout for rental properties and hoping to move as quickly as possible.

“They may need to move for a job,” said Rightmove.

“In this environment, there is a need for people with specialist jobs to be in a certain place.  Just think about the Nightingale hospitals that have sprung up,”

“Where some people have enjoyed lockdown, others have had relationship breakdowns and this has had knock-on consequences,”

“There could be people who need to move because of job losses too,”

“And working from home has left a lot of people looking for a change in surroundings,”

“Effectively we have two months of pent-up demand that needs to be satisfied.”

Supply Unable to Meet Demand

Demand for rental properties is well on its way to matching pre-Covid-19 peaks, though experts warn that supply will most likely be unable to keep up. While significantly more renters are searching for new homes than during the same period last year, new rental listings are down by approximately 4%.

The coronavirus crisis prompted many landlords to sell off parts of their portfolio or exit the market entirely, due to ongoing uncertainty regarding the buoyancy of the market and the economy in general. A recent study found that at least 12% of renters were already struggling to pay their bills due to the Covid-19 outbreak and many landlords have seen their income plummet as a result.

Would-be movers have already noted how landlords are becoming increasingly strict in terms of eligibility requirements and preferred tenants for their properties.

“They [landlords] are going to pick those with the best references and who can move in immediately. Those whose credit record is not the best tend to lose out,” commented Rightmove.

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