The peak of the 2020 sales market is likely to be September instead of the usual early summer – but that depends on many of the lockdown measures being relaxed in time.
Knight Frank has calculated that sales transactions peaked in July last year before tailing off towards the end of the year, reflecting the typical seasonal pattern of activity.
Tenancies agreed followed a similar pattern, with a more marked decline in the second half of the year.
The agency now says that once lockdown measures are relaxed – which will be in May at the earliest, with the current period of restrictions expiring on May 7 – a spurt of sales activity could push this traditional July peak back to August, September or later.
“The traditional August exodus is going to disappear this year,” said James Clarke, Knight Frank’s head of London sales. “A lot of the completions that traditionally take place in the summer will be pushed back into the third quarter of 2020,” he adds.
For markets like London’s, which has a significant international buyer sector, the delay may be more pronounced if international travel restrictions stay in place even after some domestic lockdown measures end.
Meanwhile, outside the capital, where seasonal buying patterns are more entrenched, there is a similar belief that 2020 could prove to be an exception.
“If we’re up and trading by the summer then we will have a prolonged market,” says Edward Rook, head of Knight Frank’s Country Department. “However, if this re-opening only happens later in the year, sales are more likely to be deferred until 2021.”
Christopher Bailey, head of Knight Frank’s Waterfront department, believes sellers are pragmatic about the current restrictions and are not looking to take property off the market, which bodes well for a busy second half of 2020 as supply is able to match renewed demand.
“No one’s in a rush. Low interest rates have taken the pressure off sellers who remain positive about the market and there remains plenty of pent-up demand from buyers” he says.
The number of new prospective buyers increased by 14 per cent across the UK in the year to January 2020 compared to the previous 12 months.