- 26th August 2021
- Posted by: DMM
- Category: Property Market Reports
The ongoing demand for property is outstripping availability with the UK house supply is down -26% versus the 2020 average accordingly to today’s Zoopla House Price Index. Zoopla say that the flow of new property listings has been down on average 5% on typical levels since the beginning of the year. In comparison to this time in 2018 and 2019, supply is down 33%.
Why is UK House Supply Down?
There has, of course, been a huge level of sales activity this year with sales having jumped 25% on the same period in 2019 and sales were also up again in August. Stamp Duty tax savings and people changing their way of living following the pandemic have all played a part in this demand.
Zoopla say “…with the focus on demand for larger family houses, amid a ‘search for space’, this type of stock has become stretched, reflected in the average price for a house rising 7.6% over the last 12 months. The supply squeeze for flats is more muted, and price growth for this type of home is up 1.2% on the year.”
“The second key factor is increased levels of activity among first time buyers and investors. These buyers represent net new demand, as the vast majority have no property to sell. First-time buyers (FTBs) account for around a third of all buyers, and they have been increasingly active in 2021.
Lenders tightened credit criteria and increased mortgage rates on higher LTV loans in 2020 and this squeezed some FTBs out of the market – this has been reversed, and supported more FTBs into the market. Continued stamp duty relief for FTBs means the end of the stamp duty holiday will have less of an impact on this buyer group. Yet the activity seen so far this year is likely to be a continued release of the pent-up demand after the first lockdown last year, and so levels of activity will begin to return to more normal levels as we move through the rest of 2021.”
The demand against the limited UK house supply is continuing to push up prices which, according to Zoopla, is up 6% in July, up from 2.3% in July 2020. It is taking much less time to sell too, with the time to sell at 26 days, compared to 49 days in 2019.
You can find out the details on current UK house supply in the full Zoopla House Price Index here.
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