House prices rose 2% in lockdown, claims Rightmove

House prices have actually risen by 2% since the start of lockdown, according to data from online property marketing firm Rightmove, which has reported a surge in buying activity since the housing market reopened just over a month ago.

Despite widespread forecasts of steep falls in prices – of as much as 30% - due to the economic disruption caused by the coronavirus pandemic, Rightmove said prices registered on its site had actually increased by 1.9%, compared to the price in March.

The data came as estate agent Knight Frank said it had seen “record” rates of offers being accepted in the last week as pent up demand for homes is realised following the May 13 lifting of lockdown home moving restrictions.

Rightmove said the number of agreed sales on its properties had recovered to a level last Friday just 3% down on the same day last year, with 40,000 sales agreed in total since May 13.

The firm said May and June had seen its 10 busiest days ever and that the rise in prices, to an average of £338,000, was an accurate early indicator of the scale of pent-up demand caused by the effective closure of the housing market in March.

Miles Shipside, Rightmove director and housing market analyst, said the figures showed the UK was “getting moving again.” He said: “There are no signs of panic selling or even a price dip. Some sellers who had agreed a sale before lockdown have been worrying that their buyer may try to re-negotiate with a reduced offer.

“On this evidence buyers may now be trying to exchange quickly, as there are signs of high pent-up demand and upwards price pressure.”

Meanwhile data from Knight Frank also suggested that demand was returning rapidly, particularly outside London, as buyers look to purchase in areas with more green space. It said the numbers of offers accepted on properties outside the capital was last week the highest ever, more than 50% above the average over the last five years. In London this was still up, but only a third above average.

However, the firm said the number of new prospective buyers had risen outside London to its highest level since 2018, while in London itself the figure remained below the levels seen at the start of the year.

Damian Gray, head of Knight Frank’s Oxford office, said: “Enquiry activity has been extraordinary. I’ve never been contacted by so many people that want to live outside London.”

While individual estate agents and property companies have reported a surge in enquiries since the lifting of lockdown restrictions on the property market, other indicators have been less positive. The RICS’s monthly survey of estate agents said that housing market activity declined in May, despite the market reopening on May 13, while up to 40% of prospective home buyers have said they are putting moving plans on hold because of economic uncertainty caused by the coronavirus pandemic.

The Bank of England has forecast that the UK economy will contract by 14% this year, the biggest decline for 200 years, while the EY Item Club today forecast the economy will contract by 8%. Official figures released last week showed that output dropped by 20% in April, with residential construction work falling by 60%.