Sales of homes in the UK has hit almost £150 billion since the start of the year. That’s twice the value of property sold for the same period last year. In fact, the figure equates to one in every 50 homes on the market changing hands between January 1 and April 15 this year. 

Property portal Zoopla revealed the statistics this week, showing the health of the market to date. And it looks certain to stay strong for some time yet, even with the end of the Stamp Duty Holiday looming, say property analysts.

Derth of four-bedroom and family homes

The figures also reflect the desire to move to a larger property, with a severely depleted number of three and four-bedroom family homes currently available. The numbers have actually hit a five-year low, according to Zoopla’s research, with most regions reporting a 20% drop in such larger properties.

They are particularly low in Scotland where there is a 58% drop year-on-year on four-bedroom properties. As far as England is concerned, it’s 44% in the South West and 42% in North West and 40% in the South East, says Zoopla.

And, in fact, the number of homes overall currently available on the market at the moment is 19% lower than in April 2020. It’s not just four-bedroom homes that are suffering either. Property experts believe the government’s recent introduction of 95% mortgages will also lead to a shortage of one-and two-bedroom properties for sale.

Possible future shortage of starter properties

Grainne Gilmore, head of research at Zoopla said: “More flexible working arrangements open up new opportunities for home owners to move to a further-flung location.

“At the same time, the rollout of the 95% mortgage guarantee will mean more demand from first-time buyers, fuelling demand without replenishing supply.”

Meanwhile a study into the effects of the Stamp Duty Holiday has prompted upmarket estate agency Knight Franks to suggest its ending won’t cause too much disruption to the market. That’s because it didn’t really have much effect on lower markets (ie under the £500,000 threshold), says the company’s head of research Tom Bill. He based his report on data from search portal OnTheMarket. 

He said: “With the holiday in place for nine months, buyers and sellers have increasingly factored in the need for price flexibility. All of which suggests the brakes will be dabbed rather than slammed on when the stamp duty holiday eventually ends.”

Glasgow has busiest property market in UK

At the moment those locations with bustling property markets include Glasgow, Bristol, Middlesbrough, Stoke and Nottingham.

The biggest property price increases have been found in Northern and Midlands cities, such as Manchester, Leeds, Liverpool, Nottingham and Leicester – all have more than 5% growth compared to April 2020.

Interestingly, there has been a short let-up in the carousel of property changing hands since the middle of April when lockdown ended in England. This is believed to be down to people catching up with family and friends first before then getting back to the business of property buying and selling.

The North of England continues to out-perform property anywhere else in the UK, according to data from both the government and major property portals. What’s more, it doesn’t look there will be any change for some time to come. 

The most recent figures from the HM Land Registry House Price Index showed property in the north-west has risen by 12%. In the north-east the rise was 8.9%, which is slightly less than Yorkshire and the Humber at 8.9%. Property in London rose 5.3% – this is despite the fact there was an exodus in the capital during lockdown as many city dwellers looked for property in the country. At the same time thousands of foreign nationals returned home due to both the pandemic and Brexit restrictions.

Zoopla recorded Manchester, Liverpool and Leeds as the cities with the highest growth in property values at 6.6%, 6.5% and 5.4% respectively. Of their top 10 performing cities, only one has an annual property price of more than £200,000. This means buyers in these cities will benefit from the Stamp Duty Holiday for longer. That’s because the tapering effect after June means buyers of properties valued at £250,000 or less still won’t have to pay any Stamp Duty.

Property sells faster in Wigan

The north-west reigns supreme for fastest selling properties too. According to data from Zoopla, a property in Wigan takes just 26 days to sell (from listing to sold subject to contract). Salford in Manchester together with Redditch near Birmingham, Knowsley in Lancashire, Sheffield and Medway in the south-east are all second equal with a record of 27 days to sell. Property in Liverpool takes 30 days to sell, in Manchester it’s 32 days and in Bristol property sales are concluded within an average of 33 days.

In Wigan the most popular category of property was detached three-beds in the £100,00 to £150,000 price category.

A Zoopla spokesman, said: “With lower property prices than Manchester and great transport links, it’s easy to see why houses in nearby Wigan and Salford are proving popular.

“The search for space is also playing a role, with the pandemic influencing what home hunters are searching for and a new importance placed on features like additional bedrooms and gardens.”

A forecast by upmarket estate agent Savills recently insists the north-west, together with Yorkshire and the Humber will remain the most buoyant areas for UK property for the next five years. They expect to see growth of 6% in both regions next year and 5.5% by 2023. In 2025 they predict that growth to be around 4.5% (with the north-west having gained slightly in 2024). What this means is that Savills predict house price growth in the north-west region to be 28.8% over the next five years and 28.2% in Yorkshire and the Humber. 

As a result of such growth, together with more regeneration taking place in the north of the country, it’s expected that the difference in property value between the north and south will start to gradually narrow over the first half of this decade.

We knew people were leaving their city pads – and London in particular – to head into the country last year as a result of coronavirus. We just weren’t exactly sure where they were heading. Until now, that is.

The results show that actually, many of them were heading to Cambridge, and the commuter town of Huntingdon in particular. Further north, Pontefract in West Yorkshire was also popular and so too was the Norfolk seaside town Great Yarmouth. 

Those were the top three locations (in order) for property purchased during 2020 in England and Wales according to government statistics and research carried out by specialist mortgage company Haysto.

Paul Coss, specialist mortgage broker at Haysto confirmed Covid-19 had altered the landscape when it came to UK property. 

He added: “I truly believe that when we come out of lockdown and the economy starts to bounce back, this could be a good year to move or get on the property ladder.”

Also hitting the high popularity spots were (also in order) Preston, Chichester, Chorley, Doncaster, Bury St Edmonds, Spalding and Bedford.

The top 10 table was based on the number of properties sold per 10,000 people. The numbers for Huntingdon, with a population of 26,000 people, was 400 properties per 10,000, Pontefract was 328 and Great Yarmouth, 320.

Cities losing out to countryside yearnings

Interestingly, all of the places featuring in the top 10 property popularity purchases – with the exception of Preston and Doncaster – all had populations of less than 100,000. Whereas bigger cities such as Birmingham, Manchester and Portsmouth saw demand for housing fall in comparison. 

The desire to move to more rural locations as a result of increased flexible working and a change of lifestyle, was also noted by popular property portal Rightmove last week. They announced that the most searched for location on its search engine in February was Cornwall, closely followed by Devon. In fact, searches for the village of Stithians near Truro was up 224% compared with last year, just before the pandemic in the UK. Other areas proving popular include the Isle of Skye, Norfolk and quiet villages in neighbouring East Sussex.

Exodus to country affecting commercial property

And it’s not only residential properties in further-flung locations that are proving popular – owners of commercial property have also witnessed a move from city to country. Office space company IWG had noted an additional one-fifth of queries concerned offices in country locations and as much as one-third for suburban offices. In contrast, demand for city offices had fallen by as more than one-tenth.

Whether this continues once lockdown is lifted remains to be seen. Although, new government legislation espousing flexible working is expected to be announced at some point later this year. The Bill, which makes flexible working the default position for companies, was announced in the Queens Speech in 2019. 

It’s believed this will include logging in from home and other forms of remote working. What it means in effect is that companies will have to come up with a good reason not to allow employees to work flexibly. And that can only mean more interest in property in quieter, countryside locations.

Those looking to sell their current property are perfect placed in the market right now – provided they already have somewhere to move to.

That’s because the latest House Price Index from the property portal Rightmove shows the biggest gap between supply and demand in more than a decade.

It also reveals the website received seven million visits a day last month – an increase of 40% on February last year and before the pandemic and first lockdown had begun to kick-in.

Around 17 viewers per property in Wales

Rightmove executives say there is more buyer interest per property than there has been since 2011 – 34% more, in fact, compared to the same time last year. And in Wales, there are 17 viewers for every property on the market. 

This means, of course, that asking prices have once again increased. Last month they rose 0.8% on the previous month, with the average property in England now sitting at around £321,000. It’s worth noting though that the Rightmove Index bases its scoring on asking prices, rather than what buyers paid for the property. 

The extension of the Stamp Duty Holiday provided impetus for UK property as a whole, while the imminent ending of lockdown is resulting in more sellers – as well as buyers – coming to market. After June the ‘no stamp duty on the first £500,000 of a property’ rule will be amended to the ‘first £250,000’ for a further three months, before reducing to the standard £125,000 in October.

Only in Scotland will the Stamp Duty Holiday end at the end of March, as Chancellor Rishi Sunak originally intended. Finance Secretary Kate Forbes explained that the ‘Holiday’ was introduced in order to ‘shore up’ the property market. That had indeed happened, she said, so there was no need to continue the initiative north of the border. Even during the original ‘Holiday’ period, the threshold for Scotland was only half that of England and Wales, at £250,000.

Housing deficit continually pushing prices up

As has been the case for so long, there remains a housing shortage. This, coupled with continued buyer demand for gardens and bigger homes, is giving sellers the upper-hand. Traditionally Spring has always been the best time to sell and this year looks as if it will be no exception.

Ongoing low interest rates and the introduction of the 95% mortgage initiative – where the government is encouraging lenders to provide high loan-to-value mortgages – is helping to fuel the demand. As well as first-time buyers, the mortgages will also be made available to second steppers looking for a larger home.

Rents income ‘up’ – except in London

Last month a report by upmarket property company Hamptons revealed an 8% increase in rental income in all areas of the UK with the exception of London. That was the highest rise in nearly a decade. 

Rents had actually fallen in the capital by 17.7%. They also fell in Greater London, although to a lesser degree at 0.2% in comparison to the same month in 2020.

Lloyds is the latest familiar High Street name to announce plans to expand into the private rental sector. 

The banking group’s landlord scheme, referred to as Project Generation, involves buying and renting out properties to individuals and families throughout the UK. They intend to have their first tenants moved in by the end of the year.

Low interest rates have hit the banking sector hard in recent months and it’s believed the landlord initiative is a bid to find alternative income to boost profits – in the form of high rental yields and capital appreciation.

According to a recent report in the Financial Times newspaper, senior management at the bank want to become major players in an industry which is regarded by many as ‘fragmented.’ They also believe they can provide a more professional, and quality service than that which currently exists in much of the private rental sector.

The paper reported a Lloyds spokesman saying: “As we stated in our full-year results and our strategic review last week, we are committed to broadening access to home ownership and exploring opportunities to increase our support to the UK rental sector.” 

An opportunity to ‘cross-sell’ products

Lloyds, which owns other well-known financial brands such as the Halifax, Bank of Scotland and Scottish Widows, plans on cross-selling loans and insurance to its tenants. 

The company isn’t completely unfamiliar with the housing market, having previously funded small developments. Many of its mortgage clients are also some of the UK’s largest housing developers.

Following in John Lewis’ footsteps

The Lloyds move is following in the footsteps of retail giant John Lewis who announced their intention to become private landlords last October. Again, this was in response to low profits – this time in the failing physical retail sector.

And, like Lloyds, they also have a form of cross-selling in mind where they will furnish the properties with John Lewis products and locate them near existing Waitrose stores (which they also own). The idea is renters will then shop at the supermarket too. 

Unions concerned for bank’s reputation

The Lloyds move hasn’t got everyone’s approval within the company. Independent banking union BTU, which represents many of the bank’s staff, say the landlord move could prove disastrous for Lloyd’s reputation if tenants had unpleasant experiences with those managing the rental properties.

Room for expansion in UK property

Around 5.4m homes in the UK were recorded as privately rented last year. And that figure is only expected to increase over time – despite the government’s new homes’ funding initiatives.

The current biggest provider of private rental property in the UK at the moment is Grainger. It recorded a 45% growth in its rental income in 2019, bringing the figure to £63.5m, with a 30% rise in pre-tax profits sitting at £131.3m. 

The group has developments in Bristol, Manchester and Sheffield. It also has a large presence in London, with a joint venture with Transport for London to create 3,000 new rental homes. It altered its business strategy in 2016 to build on its private rental portfolio, more than doubling its rental stock between then and 2019.