According to the Nationwide, the average house price across the UK is up 11% on last year prompted, as we know, by three things: 1) Pent-up demand following three years of Brexit confusion, 2) The SDLT (stamp duty) holiday coupled with ultra-low mortgage rates, and 3) Lifestyle changes prompted by the pandemic. Interestingly, the average percentage increase in the price of houses in England and Wales is nearly four times greater than average increase in the price of flats, as people seek more space to work from home (Source Zoopla).
In terms of the number of completed transactions, this was up 25% on last year, but the stock of available properties is far from being replenished. New-to-market properties are down 5% on what we would expect, leaving the total stock of properties for sale down by about 26% on last year, and 33% down on three years ago. These are staggering figures and have come as a surprise to us as much as to the economists, none of whom predicted this would happen, especially during a pandemic.
So we have a massive undersupply of homes for sale. This is compounded by the fact that the supply of new-build homes virtually came to a standstill during lockdown. No wonder prices across the board have rocketed over the summer. Fortunately we have training and systems in place that ensure that our sellers are always able to secure the very highest price the market will pay, whatever the market – so that’s paid off.
For the time being buyer demand is unrelenting. The question is, if everyone wants to move, why is there not a corresponding seller for everyone who wants to buy? There are three reasons; first, this year there has been a 21% increase in demand from investors, taking advantage of the temporary Stamp Duty holiday. Secondly, demand from first time buyers, who now account for about a third of the market, is up 15% on last year. Neither of these sectors have to sell in order to buy. However we suspect that demand from both these sectors could shrink a bit as the SDLT concession ends and the effects of furlough on mortgage applications is felt.
The third reason for lack of stock (and this is one that maybe you can influence) is that many people looking to buy have not yet put their own on the market because they fear they might not be able to find anywhere suitable, due to apparent lack of choice. But would you reconsider your position when you hear that about a third of sales happen “off-market”? They never even reach the portals but are sold to favoured clients of estate agents. These are people who have instructed an estate agent to sell their own property and as such are regarded as the hottest buyers in town. These are the people who are offered the best properties first.
So I’d urge you to have a little faith, and great things can happen. Why not contact us right away, even if you are only considering the possibility of moving, and we’ll happily let you have the very best of our advice, with a smile, as we love helping people move!
43-45 Cornfield Road, Eastbourne, BN21 4QG