According to latest figures from Zoopla in their published House Price Index, buyer demand soared by 40% in 2020. More than £300bn worth of sales have been agreed and house prices have been pushed up to a three year high of 3.9%.
House price growth is currently at the highest level since August 2017 – up from 1.3% compared to a year ago. Buyer demand is still high and outweighs current supply as buyers re-evaluate what they are looking for from their homes.
There is a marked demand for homes with more internal space, access to a garden and located within easy reach of parks and recreation. There is also strong demand for space to work from home as lockdown continues. Although the vaccine programme has been rolled out, buyers have reconsidered what is important to them and we have seen a once-in-a-lifetime re-evaluation of priorities.
The high demand for new homes and high levels of website traffic appears to be from committed buyers rather than speculative viewings as statistics show they are translating to sales agreed. Sales levels jumped 9% in 2020 compared to the previous year and given that transactions are taking several months to complete, many of these transactions will spill over to this year.
At present the supply of properties isn’t meeting the high demand which puts an upward pressure on house prices.
Housing market activity is above normal levels for Q1 and this looks set to continue into Q2. Zoopla research shows that annual house price growth is expected to reach 5% in February, before slowing to 1% by the end of 2021, as demand starts to weaken during the second half of the year. The number of property transactions looks set to match this year at 1.1 million.
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