Coronavirus 'may increase UK property sales' as prices hit record high

Tom BelgerFinance and policy reporter
Yahoo Finance UK
Homes in Newcastle as UK property prices hit a new record high. (PA)
Homes in Newcastle as UK property prices hit a new record high. (PA)

The price of properties going on sale in the UK hit a new record high last month, new figures suggest.

One estate agent said the market could continue to rebound despite the coronavirus pandemic, with cancelled holidays potentially pushing up the number of buyers in the summer.

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New figures from Rightmove (RMV.L) published on Monday show average asking prices of almost £313,000 in February, topping a previous peak in June 2018.

It marked a 1% jump on the previous month and a 3.5% rise on a year earlier, in another sign of the ‘Boris bounce’ in the market since December’s election.

Rightmove saw its five busiest days ever in February. Its director and housing market analyst Miles Shipside said surging buyer demand was outstripping supply, fuelling higher prices.

Read more: How the coronavirus threatens to upset the UK property market

He said the number of agreed sales had soared by 17.8% on a year earlier, reaching its highest level since before the EU referendum in February 2016. Sales are also proceeding more quickly than a year ago.

“New supply to the market has failed to keep anything close to the pace of demand,” said Shipside.

The increase in activity is widely seen to reflect pent-up demand constrained by high levels of Brexit uncertainty in recent years.

But he warned the housing market could be “prone to volatility” because of the coronavirus pandemic, despite the Bank of England’s decision to slash interest rates last week.

Lender Halifax had also warned earlier this month that the virus could derail the fragile rebound in activity in the property market. There is growing evidence of cancelled viewings and disruption to housebuilding supply chains because of the outbreak.

Read more: Halifax warns on coronavirus risk to UK economy

One industry expert highlighted a potentially counter-intuitive impact of the covid-19 outbreak, however.

Nick Leeming, chair of Jackson-Stops, a UK estate agent with 40 offices nationwide, said on Monday: “As an industry, we are yet to see the impact of Covid-19 on the market, however if fewer people opt to holiday abroad over summer, we could perhaps see an increase in activity in this traditionally slower period.”

Travel operators such as airlines report health fears sparking a significant drop in bookings, while the list of countries restricting travel to contain the virus is growing by the day.

Shipside added: “There have been no signs so far of a drop in buyer activity or interest in the housing market.”

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