The housing market is in a period of suspended animation due to the coronavirus lockdown, as shown in our monthly UK Cities House Price Index*.
Despite the social distancing restrictions, our latest data shows that browsing levels have started to rise, as has demand from buyers.
Some buyers also want to press ahead with agreeing sales, encouraged by government support for the economy and low mortgage rates. But the number of new sales being agreed is much lower than early March 2020, and closer to the quieter Christmas period.
The fall and rise of housing demand since the start of coronavirus
The demand for housing fell by 70% between the start of March 2020 and the week ending 29 March, with the greatest decline recorded ahead of the coronavirus lockdown.
The drop in demand bottomed out in early April and has since started to improve slowly from a low base. Despite a steady increase in buyers looking for homes, demand still remains 60% below the levels recorded at the start of March.
Check out the interactive map below for March changes to UK Cities house prices.
While buyers are unable to view homes for sale in person, they can still browse online. Estate agents and new-build developers also offer virtual viewings.
There are still plenty of homes to choose from with total property listings down just 4% over the last few months.
In fact browsing activity has also been picking up over the last few weeks. After declining by more than 50% in March, browsing levels are now 37% lower than 1 March.
Richard Donnell, Director of Research & Insight at Zoopla, said: “There is a two-speed housing market at present. Parts of the market are at a virtual standstill as a result of the physical restrictions that have stopped new supply coming to the market and the viewing of homes for sale.
"However, the online browsing of homes for sale and buyers expressing interest in property have been rising off a low base over the last two to three weeks. Demand for housing is still 60% lower than at the start of March, but we expect interest in housing to continue to improve slowly.
"Many people have spent more time at home in the last few weeks and some may feel the urge to move and find more space or consider the potential for remote working. This could boost activity in the second half of 2020, but this all depends upon how much the economy is impacted over the rest of the year and the impact on levels of unemployment.”
Which cities have already seen a pick-up in demand?
In mid-April demand for housing in cities across northern England has rebounded more strongly - notably in Manchester, Liverpool and Leeds. These are all cities where 2020 started strongly and where housing affordability remains attractive, and where there may be a faster bounce-back when restrictions lift.
By contrast, cities with traditionally more expensive properties, such as Cambridge, Edinburgh and Southampton,have seen a limited improvement in demand in April.
What's been happening to house prices?
Our data shows that annual house price growth was at 1.8% across the UK in March, higher than a year ago when it was running at 1.2%. It's too early for our data to be fully pricing in the impact of coronavirus, but the monthly growth rate of 0.1% recorded in March was the lowest for a year, and a third of the level seen in January and February.
In terms of house price growth by city, the five best performing cities recorded annual house price growth of more than 3%. Nottingham continued to lead with an annual growth increase of 4.1%.
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What's the outlook for the housing market?
Total levels of activity have been affected by coronavirus and the subsequent lockdown. Our research and insight team estimates that more than 370,000 sales could currently be stalled in some way.
Some of these sales will simply complete later in the year, but overall, the number of completed home sales this year could be 50% lower than in 2019.
"Without doubt, once the coronavirus restrictions are relaxed, we should expect the release of demand that has been building since Brexit and political uncertainty that destabilised market sentiment.
"That said, the case for a stamp duty holiday to support a resumption of market activity is clear and a high proportion of savings are likely to be spent, further stimulating economic activity.
"It is too early to register any pricing impact given new sales volumes are 90% down on the start of March. Demand is rising but there is a long way to go until we see a return to typical levels of market activity."
Top 3 takeaways
1. Demand for homes fell by 70% over March 2020 but the decline bottomed out by early April and there was an increase in demand over the three weeks to 19 April
2. While agents are taking on fewer homes, the total number of homes for sale was just 4% lower than at the start of March, signalling no mass withdrawal of homes listed for sale
3. Annual house price growth to March 2020 was up 1.8%, but the price change registered over the month of March was the lowest for a year at 0.1%
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* Using more data than any other major house price indices, Zoopla’s UK Cities House Price Index is powered by a range of data inputs including agreed and completed sales prices plus independent property valuations registered in March. The index will continue to be published but with limited market evidence greater volatility of results is expected. 75% of the sales data for March was for deals agreed two to four months ago, so it will take time for house price indices to respond. However, this latest index report also incorporates real time market data, recorded up until 19th April, providing one of the most up to date analyses available for housing market trends.