UK Faces Biggest Housing Stock Shortage since 2015, Zoopla Reports
The housing crisis in the UK has reached new heights, with one of the country’s leading property sites having highlighted the growing disparity between supply and demand. According to the latest Zoopla monthly House Price Index, the market is facing its biggest stock shortage since 2015.
Zoopla reported that while demand from prospective buyers remains elevated; around 20.5% higher than the overall average last year, available inventory levels are 26.4% down from last year’s average.
When compared to the markets of 2018 and 2019, total available inventory is down a full 33%.
Record demand has also resulted in a significantly reduced average selling time for properties listed on the market. It now takes on average 26 days to sell a home compared to the 49-day average recorded in 2019.
Growing demand for larger homes with private outdoor spaces continue to have a knock-on effect on property prices in key regions across the UK. While the average house price has increased by around 7.6% over the course of the past year, the average flat price has increased in value by just 1.2%.
Fewer properties are also being listed than in previous years; down around 5% on the usual averages, Zoopla reports.
Increase in Investor Demand
Property purchase intent for investment purposes is up a huge 21% compared to last year. However, construction industry suspensions due to the events of 2020 have resulted in an 11% reduction in the number of new homes being built compared to normal annual averages.
House prices continue to rise across all regions of the UK, with Wales (+9.4%), Northern Ireland (+9%) and the North West of England (+7.9%) having seen the highest growth of all.
By contrast, annual property price growth in London once again trailed behind at just 2.5% as buyers set their sights on properties away from busy urban centres.
No Major Stamp Duty Slowdown
Speaking on behalf of Hometrack VP of product and technology, Spencer Wyer highlighted how the partial withdrawal of the stamp duty holiday had little to no impact on the performance of the housing market.
“Despite the supply constraints shaping the UK property market, high demand for property is sustaining mortgage volumes, which was high compared to the normal market average for July in 2017-2019, regardless of the tapering of the stamp duty holiday at the end of June,” he said.
“Such demand is seeing homes change hands more quickly, making the automation of mortgage applications through to offers ever more important to the industry and to our customers’ journeys,”
“Demand is set to remain strong into H1 2022, especially for family houses priced up to £350,000 – but this is where supply is most stretched,”
“If there is a slowdown in activity levels or the rate of price growth over the coming months, it will most likely be driven by the lack of supply and buyers holding out for new stock,”
“Demand for property is likely to moderate as well, due to the reduction of government stimulus,”
“All that said, we are still on track for an uptick in transaction volumes this year – expected to reach 1.5 million, up from an annual average of 1m – 1.2 million over the last decade – which is great news for the business pipelines of mortgage lenders and brokers.”