Agent highlights 'loo roll effect' to refute market crash predictions

An estate agent has looked to loo roll to explain why he thinks house prices won’t crash but the pace of growth may slow.

Matt Nicol, managing director of Worcestershire-based estate agency Nicol & Co, has predicted that demand will be sustained by the shortage of properties as well as an increase in people reaching prime buying age.

He is forecasting average house price growth of 6% per cent by the end of this year.

That may seem bullish given other predictions of a market crash, but he highlights the rush to buy loo roll during the pandemic to explain his reasoning.

Nicol said: “If you forget about the 2007-2008 price crash, house prices typically rise between 3-5% each year.

“So with our prediction that house prices are going to go up by 6%, and with others predicting as high as 7%, we’re still in a very, very strong market.

“We’re expecting things to continue in this way because basically there’s still a supply and demand issue: there’s a great demand for properties, but a shortage of properties on the market right now.

“You will remember the loo roll prices that came about when everyone was out panic buying? Prices of loo roll went up because there was a high demand for it and a lack of supply.

“It’s similar-ish with houses right now: there’s a lack of supply, lots of people looking to purchase and as a result that’s pushing the prices up still.

“It’s not going to be as bonkers as it was, but you’ll still find that house prices are on the up.”

He added that the country can’t build homes quick enough and one of the major issues is that the bricks needed are still going up in price.
 

Nicol said: “Back in 2020, a thousand bricks were costing around £595, and they now cost about £795 for the same brick.”

He also explained that the number of prime-age buyers, described as around 35-years-old, has also increased by 235,000 growing from around 4.2m in 2010 to 4.435m today.

He said that this growing number of buyers comes on top of growth in the number of households which have increased from 26 million in 2010, to 28 million today, adding: “We don’t think this market is going to drop.

“We think it may well slow down slightly, as the increase in interest rates has an impact on buyers’ borrowing power. But we’re not going to see a drop off in interest in properties.”