Market Insight: November 2020
With a second national lockdown in England commencing on Thursday 5th November, many businesses and industries are set to close their doors once again. However, the Housing minister has announced that, unlike the first lockdown in March, the housing market can continue to operate throughout this period. This follows a period where the Wirral entered ‘Tier 3’ local restrictions on 14th October – the strongest category issued.
Before these additional restrictions surfaced, we suggested that the final quarter of 2020 would see continued optimism for the property market in Wirral and Cheshire West. Given that activity typically cools down in the latter weeks of the year, is there still enough activity in the market to fuel a strong finish to 2020?
Given the Wirral and West Cheshire areas have been living under additional restrictions since we released the October Market Insight, it gives us great pleasure to report another strong month for the local property market. Figures from Rightmove indicate that the number of sales agreed in October have increased 35% on 2019; a fifth consecutive month of rises since the property market re-opened following the first lockdown.
Monthly sales agreed on Rightmove by month across Wirral and Cheshire West (Rightmove 2019-20)
As it stands, if no further sales are agreed for the remainder of 2020 then there will still be an annual increase of 3.4% on 2019. This may come as a surprise considering the current economic climate, however the clock is ticking on the Stamp Duty Land Tax (“SDLT”) holiday deadline of 31st March 2021.
With home working now much more common, and looking set to stay for the foreseeable future, there has also been a significant rise in the volume of buyers registering from surrounding cities. Traditionally, property buyers on the Wirral already live in the local area, meaning that there has been increased competition in the market in recent months.
This trend is reinforced by the huge 51% increase in new buyer registrations in October compared with 2019, marking the busiest October on record for Karl Tatler Estate Agents. Agents have had to adapt strongly to protect those involved in the viewing process, which has been assisted by the Rightmove platform with a ‘virtual viewing’ feature to encourage fewer physical property visits.
When the property market re-opened earlier this year, it seemed like a jump in stock levels could have been a reaction to pent-up demand over lockdown. This was further boosted in July with the announcement of a SDLT holiday until 31st March 2021. We’re now in November and new instructions continue to hit Rightmove in high volumes.
Not only did new instructions increase by over 20% in October on the previous year, but there were more instructions than any month in 2019. Confidence is clearly very high among buyers and sellers, which has allowed the market to balance supply and demand perfectly over this period.
Monthly new instructions on Rightmove by month across Wirral and Cheshire West, including winter trend (Rightmove 2019-20)
The property market operates on an annual cycle which is almost always predictable. Activity builds during the early months, peaks around summer, then cools off towards the end. November in particular marks the first sharp drop in activity levels as focus shifts towards the Christmas period, followed by an even steeper decline in December.
This year has highlighted just how unpredictable the property market has been across Wirral and Cheshire West postcodes. Given the timing of the first lockdown, the market had barely warmed up before all activity ceased for several weeks. There have been record levels of market activity during a period of economic uncertainty, underpinned by a lucrative Government initiative designed to kickstart the property market.
Volume of new buyer registrations by location, registered between May - October 2020 (Karl Tatler data, 2020)
There are usually fewer driving forces behind a property move at this time of year; in most cases it could wait a couple of months until Christmas and New Year have passed. However, the SDLT deadline is fast approaching and could be an opportunity missed if not acted upon before 2021 commences.
As a point of reference, it typically takes around 12 weeks to progress a sale through to completion; this can vary drastically depending on the circumstances of each individual sale. However, the demands on solicitors are currently much greater than usual which means the average exchange time has increased to around 16 weeks; four more than normal.
The good news is that some of this time has been offset by much shorter sale periods. Demand for property is still very high which means that coming to market now, at the right price, could ensure you get an offer accepted in time to benefit from the SDLT holiday. For that reason, we are likely to see an especially busy November and December period for the local property market.
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