Housing supply is at its lowest point for six years, according to reports published in The Sun this week, as buyer demand keeps rising despite the end of the stamp duty holiday.
As we’ve reported before, there is an awful lot of confusion and disagreement among property experts as to what is going to happen to house prices over the coming year.
According to Zoopla, the most recent industry body to offer its opinion, demand for houses rose by 20.5% between June 2020 and June 2021 while, during the same time period, supply dropped by 26%. There are no signs that supply will increase until we’re well into 2022 and development projects that were hampered by the pandemic can finally be brought to market.
As of the last available data, June 2021, the UK’s average house price is £266,000, 6% higher than June 2020 and as demand continues to remain strong, prices are only destined to get higher due to such a drastic shortage of supply.
High demand and low supply is also forcing buyers to act very quickly – in 2019, houses took an average of 49 days to sell. Today, it takes just 26.
Zoopla’s Head of Research, Gráinne Gilmore, said:
“…more households will decide to move as office-based workers get confirmation on flexible working rules.
“This means higher levels of demand will still be evident, and potential vendors with family houses to sell could be in pole position.
“However, the lack of supply, especially for family houses, means the market will start to naturally slow during the rest of this year and into next year, as buyers hold on for more stock to become available before making a move.”
Generous family homes are hot property right now, outperforming all other types of home on the market as buyers look for more space after enduring a year-or-so of lockdown.
Marc von Grundherr, Director at London estate agent, Benham and Reeves, said:
“The current shortage of housing stock amongst estate agents across the country is now the industry’s biggest talking point.
“With demand still very strong due to the continuing enthusiasm from home buyers awakened by the stamp duty holiday plus, the cheapest mortgage rates we’ve ever seen, this continuing imbalance will only mean one thing – and that’s continuing price rises.
“It’s tempting to advise would be buyers to wait things out until the market settles however the inevitable consequence of doing so, especially for hard-pressed first time buyers, is that it will cost you dearly in higher home values if you do.”