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The search for stock

Rory Joseph is director and Sebastian Murphy is head of mortgage finance at JLM Mortgage Services

At the moment, the housing market tends to feel like would-be home buyers are in the collective thrall of FOMO – for those of you not familiar with this acronym, it means Fear of Missing Out.

As we count down to the first stamp duty deadline at the end of June, it should be fairly obvious to all that completing a purchase before then in less than six weeks is nigh-on impossible.

This probably won’t stop some from trying though, and while a number of borrowers will be happy with the partial saving afforded by the secondary stamp duty deadline up until September, there will be others who take affront that their purchase can’t be achieved within a record timescale, in an incredibly busy market, instead deciding that the system is working against them.

In a sense, this is the rough we have to take with the smooth, because while we’re sure we’ve all benefited from the introduction of the stamp duty holiday – and it was absolutely the right decision to extend and then provide a partial extension in order to cut the risk of a cliff-edge drop – there will probably be a part of us that is looking forward to it ending in the Autumn.

The reason being that this government intervention – and we’re acutely aware the government interferes in the housing market all the time – does create an artificial environment and may well induce individuals to act in a way they wouldn’t normally act.

Hence perhaps why we are hearing anecdotal evidence of properties being offered on sight unseen, or properties having tens of offers, or properties coming to market and not even making it to the portals before they are ‘snapped up’. This is the language and action of ‘boom’ times when FOMO kicks in and a sense of sanity and reality is lost amidst the desire to get a property in the right location, with the right amenities, etc.

Of course, the demand is one side of the equation, but perhaps the real problem lies in the supply of properties coming to market – you will have seen those adverts with homeowners suddenly realising the current value of their house and deciding now is the time to put their home up for sale. There is a very good reason why those adverts run now and that is because agents are desperate for stock.

In a very poor Star Trek pun, agents are the Captain Kirk of the housing market at present – ‘In Search of Stock’ (told you it was bad) – and that is a problem that blights the entire market. It’s not just second-hand property that is required of course but hundreds of thousands of new-builds each and every year just to keep up with demand. If you need any evidence around why property investment is still popular here it is.

The Queen’s Speech (once again) included measures designed to combat this endemic problem in the form of planning changes, designating areas for greater house building activity, which on the face of it should boost supply, unless of course the major developers decide (as can be their want) to purchase the land, bank it, watch the value rise over how ever many years and only then decide to actually build on it.

There’s also been talk about increasing brownfield development, in particular repurposing commercial properties to residential, but there lie numerous obstacles to overcome here. How diverse can that housing be? You can only turn an old Debenhams into flats really, but are they the properties required and building more of these might simply drive the prices of three/four-bedroom houses up. Then you have the ongoing cladding problem to deal with, a particular issue on those older city centre retail premises.

That said, after the pandemic, it would clearly be a positive to breath much-needed life into city centres which have clearly suffered as a result of the vast majority of people working from home. Our city centres do need the stimulus but clearly the developers need to understand the types of properties in demand and work out how they can deliver them, before just simply producing a load of small apartments which suit no-one.

Overall, our market might remain a rather odd one throughout the rest of 2021 and certainly over the course of the next few months. That said, if the intervention can continue to stimulate demand – and we can start to get our house in order in terms of supply – then there should be plenty of opportunities for advisers ahead. Lenders and lending policies permitting. Don’t get us started on that.


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