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Dramatic Fall in Housing Stock

Dramatic Fall in Housing Stock
Sep 14 , 2021

Potential sellers are wary of putting their properties on the market without somewhere to move to because of a lack of available stock – compounding the issue.

Propertymark found that June housing stock was 40% lower than in January, as there are only 23 properties per estate agency branch.

As a result there are an estimated 19 buyers competing for every property.

Nathan Emerson, chief executive of Propertymark, said: “Sellers have seen the headlines about the huge demand and are nervous about joining the market and selling quickly with nowhere to go.

“Firstly, if you are serious about buying in the current market it’s all about being in a position to proceed.

“Very few people can buy without selling, so having a buyer waiting gives you an edge over those you may be competing with.

“If you wait to find a property before putting your house on the market, the likelihood is the property will already have been sold by the time you secure an offer.

“It’s also important to remember that the average time being taken for a sale is around 16 weeks to exchange, that’s 4 months and the likelihood of not finding an onward property in that time is very small.”

The number of properties per branch is lower than previous years, as there were 38% more homes available in June 2019 and 2020 compared to June this year.

In July 2020 the stamp duty holiday was introduced, which has served to fire up market demand in an environment where sellers are cautious about putting homes on the market.

House prices in July rose after falling in June, according to the Halifax.

They were 0.4 per cent higher than in June, although in annual terms, prices were 7.6 per cent higher than in July 2020, slowing from June’s 8.7 per cent annual increase.

Agents are confident this signifies an orderly slowdown ahead of the eventual end of the stamp duty holiday in late September.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “After a record-breaking June, the housing market is becoming accustomed to more ‘normal’ levels of activity but still above what we would reasonably expect at this time of year.

“There is no serious price correction or steep fall in transactions as these figures bear out. Certainly, we are seeing that nearly all sales agreed before the stamp duty concession began to taper off are proceeding and without price renegotiation.

“Available stock remains at low levels and this is continuing to support values, along with cheap mortgage rates.”

And Lucy Pendleton, property expert at independent agency James Pendleton, adds: “The reality is that no one we’re dealing with is even mentioning the stamp duty holiday. It’s a distant memory, and many of those who realised they weren’t going to make the June deadline and stepped away, have returned, determined to make their move happen.

“There isn’t the same level of activity as there was four months ago but that was never going to be the case.”

Meanwhile the Keller Williams UK chief executive, Ben Taylor, comments: “Homebuyer confidence remains high at present despite many having to battle it out with multiple other buyers in order to secure a purchase. This continued imbalance between supply and demand will ensure house price growth remains buoyant over the summer months, although we can expect a slow in pace as we approach the final quarter due to a combination of the stamp duty holiday ending and wider seasonal influences.”

Russell Galley, managing director of Halifax says: “Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008.”

He adds: “This has been fueled both by the ‘race for space’ and the time-limited stamp duty break. With the latter now entering its final stages, buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.

“Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”