Big-spending home buyers in the U.K. are spearheading the country’s unexpectedly strong real estate market rebound, according to a report Monday from Knight Frank.
The number of sales subject to contract—meaning the sellers have accepted an offer but no paperwork has been completed and the sale is not yet legally binding—on properties priced above £1 million (US$1.3 million) jumped 100% in the week ending Aug. 16 compared to the same time last year, the report said.
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For properties valued between £750,000 and £1 million, the increase was 119%.
By comparison, the number of offers accepted for properties valued up to £500,000 was 53% higher than last year, and the overall number of properties subject to contract jumped 61% compared to the same week in 2019, the report said.
“Such a strong rebound reflects the ongoing release of pent-up demand following lockdown, coupled with the recent cut to stamp duty,” Oliver Knight, head of residential development research at Knight Frank, said in the report.
“It is also likely that there are wider behavioral shifts in play, as people reassess their housing needs—the ‘escape to the country’ narrative is one that has been covered in detail,” he added.
The nation’s coronavirus lockdown measures had involved a near-complete shutdown of the real estate sector, with buyers and sellers being urged to postpone moves and physical viewings banned. But demand for homes has surged since the U.K.’s markets re-opened, starting with England in May.
Buyers who delayed their moves have returned to the market, joined by a wealth of new buyers looking to upgrade their living conditions as a result of more time spent at home, or move away from densely populated areas.
Actual sales, though, were still lagging behind last year’s numbers in July, according to data released Friday from the government. There were 70,710 property transactions last month, 14.5% higher than June’s levels, but 27.4% lower than July 2019.