Multiple industry reports today indicate that demand is far outweighing supply in both the for-sale and rental markets as we approach the second quarter of 2021.
Rightmove has announced that the current housing market is ‘the best seller’s market in 10-years’, given that the excess of demand over supply is ‘bigger than at any time over the past decade’.
According to reports, the number of buyers interested in each available home on the market is at a record high, 34% higher than this time last year (‘this time last year’ was just before the lockdown truly hit the UK, and the market was enjoying a strong period).
Despite this dire lack of stock, which risks pushing property prices even higher than they already are, Rightmove states that the situation may improve for buyers as lockdown eases, the vaccine programme rolls out at remarkable speed, and more sellers feel safe entering the market.
Landlords have the upper hand
As homebuyers struggle with an under-supplied market, renters, too, are suffering the same conditions.
According to lettings agency Hamptons, the ‘number of rental homes on the market fell by double digits percentages in every region apart from London’ when compared to the same time period last year.
In real terms, this means that in the 12 months since the start of the first UK lockdown in March 2020, around 300,000 fewer properties have arrived on the rental market compared to the preceding 12 months.
London, so often an outlier in the UK housing market, continues to defy industry trends by being the only region in the UK where more rental homes are now available when compared to this time last year.
What should renters and buyers do?
For tenants and buyers, this news marks a difficult moment in time. Not only is there a distinct lack of choice but competition is extreme which means those buyers with the deepest pockets can sweep up all of the available properties leaving those who are on a tighter budget out in the cold.
Here at Moving Home Advice, we’re concerned about the 95% government-backed mortgage scheme outlined in the Budget earlier this month. The scheme is designed to help first-time buyers who can only afford a 5% deposit, but these revelations about supply and demand mean that these buyers are still going to struggle to get on the housing ladder: not only is there great competition for homes, but those who can afford to throw an extra five grand at the seller are going to beat those who can only afford the asking price. We can only hope that Q2 of 2021 sees a large delivery of homes onto the market and that the government finds a way to quickly create sufficient affordable new homes.