House price growth could be halted by oversupply of property

The strong house price growth experienced in recent months could soon be 'marred' by oversupply, according to Home.co.uk.

The property website says the problem could be worse in London, the East and the South East of England - the regions where there have been the most new instructions.

After a phenomenally busy August for estate agents, Home says that a glut of new stock can be digested by a bounce back of mortgage approvals.

According to the Asking Price Index for September, the market is still playing catchup post-lockdown. This is despite stock levels being 37% inflated since April in London, for example.

Home suggests, however, that the total number of new listings from March to August is still 10% less than during the same period last year.

Aside from the capital, demand in Scotland, Wales and northern English regions will not be overwhelmed due to more moderate increases in the supply of homes.

For example, the analysis shows that in the North East there has been no increase in supply over the last few months when compared to the same period in 2019.

Home says that regions with new supply levels at the same or less than last year are experiencing the most 'vibrant' house price growth.

Supply of new sales instructions across the UK was up 25% last month when compared to August 2019. The new listings supply in the capital increased by 71% over the same period, a trend that could threaten a market correction in the coming months.

The stock count for September currently sits at 7.3% lower than in the same month last year, says Home, as high demand continues to eat into new listings.