More activity at higher price points means the value of homes selling is 26% higher than in 2019, with the value of sales agreed in 2020 up £62bn on the previous year, the latest Zoopla House Price Index shows.
Zoopla found that the pandemic has driven a seismic search for space and quality of location, with 40% more buyers across the whole of 2020 compared to 2019 – despite 2+ month closure of UK housing market.
The highest rates of price inflation are in regional housing markets, but greatest increase in market activity has been concentrated in London, the South East and Eastern England.
Richard Donnell, director of research & insight, Zoopla, said: “The housing market is ending 2020 strongly with more buyers looking for a home than this time last year. More sales at higher prices have boosted the value of homes selling in 2020, led by a strong rebound in southern England.
“The ‘once in a lifetime re-assessment of housing’ kick-started by the pandemic has further to run in our view and this will support demand into 2021. With a long Christmas weekend, and many households isolating in smaller groups, we expect interest in housing to be stronger than usual ahead of the traditional Boxing Day bounce when interest in housing jumps and the next tranche of would-be buyers.
“While market activity is being boosted by latent demand unlocked by the pandemic, the housing market is not immune to economic forces and rising unemployment. Economic pressures are already impacting in parts of the market, reducing the volume and share of sales in less wealthy areas, for example.
“Looking ahead to 2021 we expect house price growth to reach 5% by mid Q1 and then slow to +1% by the end of the year as demand starts to weaken over 2021 H2. The number of completed housing transactions will be buoyed by a strong Q1 with sales agreed over 2020 Q4 completing early next year.
“Overall, we expect the number of completed housing transactions to match 2020 levels at 1.1m.”