The property market is currently in a unique position where the number of house hunters looking for their next home is significantly outweighing the number of properties on the market for sale.
The difference between buyers and sellers in the market has grown to its widest in eight years, according to RICS. Recent figures have also shown that housing market demand is up a huge 28.6%, and available properties to buy are down a staggering 20.8%. Whilst I am, of course, aware of how the property market is performing, the vast disparity in these figures still surprised me.
Depending who you talk to and when you talk to them, it’s likely that they’ll have a different opinion on what this really means for the property market in the short and long-term. However, I can say with certainty that this huge demand outstripping supply is putting substantial pressure on house prices and driving them up.
Nationwide has reported a 10.9% annual increase, which is one of the highest year-on-year increases that I, and the property market, have ever seen.
It’s likely that some of this demand is down to the stamp duty extension, however I’m not completely convinced that that is exclusively the cause. According to figures by Nationwide, 68% of homeowners surveyed at the end of April 2021 who were either moving home or considering a move, actually said that this would still have been the case even if the stamp duty holiday had not been extended.
This figure leads me to believe that, of course, the stamp duty has had an influence. However, the increase in buyers is more down to a natural course that has run during the pandemic. We are all aware of just how much time we’ve all spent in our homes over the past 15 months, and it’s completely natural and expected that people have reviewed their living situations and have potentially reprioritised what they and their family need in the future.
It hasn’t come to a shock to myself or anyone I know in the industry that people’s needs have changed. Now lockdown has eased, the opportunity has arisen for movers that it is now much easier for people to move, compared to last year. So now people are taking their chance and making their move.
Personally, I don’t see the market falling off a cliff once the stamp duty ends. I think that as we move further away from the pandemic that more people will decide to sell up and move and so we’ll see instructions increase and the supply and demand figures move closer together.
It is worth keeping in mind that interest rates remain at historic lows, and that there are still a huge number of buyers who have, not for lack of trying, missed out on properties who remain in the market ready and waiting. There are also a number of government initiatives such as the First Homes scheme and the 95% mortgage scheme that will continue to incentivise buyers, therefore putting more demand on the market.
So, what does the future hold for the property market? Well no one can say with certainty, however I’m confident that it’ll remain buoyant for the foreseeable future. Whilst it may level out towards the end of this year, I predict 2022 will be another busy year as believe there is still plenty of pent up demand dating back to Brexit and more recently as a result of Covid.
*Vince Courtney is Sales Director at Andrews Property Group