As we finish up September, the initial surge in property market activity following the lockdown easing appears to be losing momentum as economic challenges loom.
Across the UK, prices fell 0.5% month-on-month in August and early data suggests another small decline in September. Mortgage approvals are also dropping again after spiking this summer, indicating caution among buyers.
In London, values declined another 1.3% in August driven by continued weakness in prime central areas. Transactions remain around 40% down annually as urban exodus trends persist post-lockdown.
By contrast, regions like the South West continue seeing higher demand for larger properties with more outdoor space. But even here, the bounce is fading with sales growth flatlining.
In Essex, the market mood seems increasingly nervous. While year-on-year transactions remain up, monthly completions dropped 10% in September as buyers grow wary. Mortgage availability has also tightened slightly.
Rising COVID cases and new restrictions have added to existing economic uncertainty. With furlough finishing up and unemployment expected to surge, budgets are likely to come under increasing strain.
While property prices have been resilient so far, slower sales point to rocky times ahead. As government support winds down but the recession bites, a bumpy landing seems probable for the housing market this autumn.
In summary, the market rebound following the easing of lockdown already appears to be running out of steam. With major headwinds on the horizon, maintaining momentum looks set to be a challenge in coming months.
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