As the UK housing market continues to boom and prices refuse to calm, buyers are going to extreme measures to secure a purchase while some industry powerhouses start the search for a true solution to the nation’s perpetual housing crisis.
For the third consecutive month, the percentage of buyers who paid over the asking price for their homes hit an all time high in June.
Research from NAEA Propertymark, an estate agency membership body, shows that 40% of those who bought a home in June paid more than the asking price. The previous record was 33% and came last month, in May.
The reason is lack of supply in a time of extreme demand – there simply aren’t enough homes on the market to satisfy the number of people who want to buy them. Buyers are, therefore, offering to pay above the asking price in the hope that it will beat off the stiff competition.
Many experts expected market demand to fall with the end of the stamp duty holiday in June, but, so far, this has not happened. One reason for this is the large number of first-time buyers currently in the market.
First-time buyers are exempt from stamp duty up to a price of £500,000 regardless of the stamp duty holiday. Since March, first-time buyers have accounted for 27% of purchases each month so, when the holiday came to an end on 30th June, this significant portion of demand remained unchanged.
With demand surging, supply has remained stagnant. In June, each UK estate agent branch had an average of 23 properties on its books, another record breaker, but in this case an all-time low having dropped from 25 per branch in May. At the same time, the average number of house hunters who registered with each branch was 426. The shortage of stock has never been more obvious.
More than a fad, this is a crisis
Some experts still think today’s extraordinary housing market is temporary, the result of a freak year of pandemic and lockdown. But, in truth, the pandemic has simply worked to give focus to a longstanding problem in the UK – a housing crisis.
There are simply not enough good homes for those who need them, especially those from low-income households. And while every ruling government party for the past decade or two has pledged the delivery of enough new homes to solve the crisis, none of them have followed through on the promise.
Today, some of the industry’s biggest private companies have made a move to try and solve the crisis on their own, with Nationwide leading a group of more than 25 major organisations who have come together to create “action groups that will collaborate to help solve existing and future problems, with four key focuses– New Homes, Green Homes, Rental and Delivery of Homes”.
The aim is to push through the delivery of more new homes, ensure that a sufficient chunk of them are ‘the right types of home’ – in other words, affordable – and ensure that they are delivered with sustainability in mind.
The news comes after Nationwide revealed that 63% of people say the UK has a housing crisis, a figure that rises 71% among private renters.
Nationwide Chief Product & Marketing Officer, Sara Bennison, says:
“The pandemic served to highlight the importance of home for all of us although, as our Future of Home research showed, it also exacerbated many of the issues which have bedevilled the housing system for years. I have been so heartened by the generosity of time and spirit shown by all the organisations who joined us for a series of roundtables on the subject.
“The challenge was how can we move from rehearsing the problems of the past to coming up with practical, workable solutions in the future. By thinking about the whole system together and not just the individual components where each organisation plays, we are genuinely excited by the ideas these action groups can table for the mutual good of all.”
There is now a renewed sense of hope that the influence and clout of these 25 major industry organisations will push through the changes that the UK has desperately been waiting for and that the government has failed to deliver.