The very strong housing market seen throughout this year is set to extend into 2022 as a stock shortage is forecast to continue.
Zoopla says that notwithstanding the reduced level of activity since the stamp duty holiday deadline of June 30 was passed, there remains many signs of a strong market. These include:
- stock of homes for sale down 26.4 per cent compared to the 2020 average, with “low supply set to shape the market well into 2022”;
- properties selling more quickly, with the average time nearly half that in 2019, down to 26 days - down from 49 days in 2019;
- an increased number of sales over the past 12 months, with one in 20 homes changing hands over the past year, compared to one in 25 in 2019;
- stock shortage at its worst for homes priced up to £350,000, while supply of family houses has become most stretched;
- average house prices rising 7.6 per cent in the past 12 months while flats increased only 1.2 per cent on overage.
The portal, in its latest and highly detailed analysis of the housing market, says new listings are now running around five per cent below average, while increased activity amongst first-time buyers and investors is absorbing stock while failing to replenish it.
Zoopla suggests that first-time buyers have been increasingly active in 2021, supported by lenders who have reintroduced products that facilitate higher Loan To Value mortgages.
Meanwhile investor demand is also up more than 21 per cent compared to the 2020 average, boosted by stamp duty relief.
Finally, the supply of new homes, which has slowed in 2021 due to the temporary hiatus in the construction industry during the first lockdown, is down 11 per cent in England, and while supply has started to pick up again, the dip has had an impact on the volume of homes available to buy.
Gráinne Gilmore, head of research at Zoopla, comments: “The post-pandemic ‘reassessment of home’ - households deciding to change how and where they live - has further to run, especially as office-based workers receive confirmation about flexible working, allowing more leeway to live further from the office. 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.
“As we move into 2022, there will be a strong start to the year in line with seasonal trends, but after that a return to more usual levels of activity among first-time buyers, the effect of the ending of the stamp duty holiday, and some buyers waiting for more stock to become available will result in a slow repairing of stock levels through H1.”