Zoopla: Market facing greatest stock shortage since 2015
The UK property market is facing its greatest stock shortage since 2015, according to the Zoopla monthly House Price Index.
While buyer demand has remained strong – up 20.5% compared to the 2020 average – stock levels are down 26.4% compared to the 2020 average.
Zoopla found that total stock was down 33% when compared to the more normal markets of 2018 and 2019.
The average time to sell is now running at 26 days, down from 49 in 2019, while sales agreed are running at 21% above levels seen in the summer of 2018/19.
While the average flat in the UK has increased in value by 1.2% in the past 12 months, the average house has increased by 7.6% over the same period.
New listings were found to be running around 5% below the average since the start of the year.
Investor demand was up more than 21% compared to the 2020 average, but the supply of new homes, slowed in 2021 due to the temporary hiatus in the construction industry during the first lockdown, was down 11% in England.
House price growth was noted at +6%, down slightly from June’s growth of +6.3%, but up from +2.3% in July 2020.
At a regional level, property price growth was highest in Wales (+9.4%), Northern Ireland (+9%) and the North West of England (+7.9%).
At a city level, Liverpool continues to lead the way with price growth of +9.4% over the past year, resulting in an average price uplift of £11,731 per property.
In contrast, London trailed with an annual +2.5% rise, although this was a rise from +1.9% growth in March this year.
Spencer Wyer, VP of product and technology at Hometrack, said: “Despite the supply constraints shaping the UK property market, high demand for property is sustaining mortgage volumes, which was high compared to the normal market average for July in 2017-2019, regardless of the tapering of the stamp duty holiday at the end of June.
“Such demand is seeing homes change hands more quickly, making the automation of mortgage applications through to offers ever more important to the industry and to our customers’ journeys.
“Demand is set to remain strong into H1 2022, especially for family houses priced up to £350,000 – but this is where supply is most stretched.
“If there is a slow down in activity levels or the rate of price growth over the coming months, it will most likely be driven by the lack of supply and buyers holding out for new stock.
“Demand for property is likely to moderate as well, due to the reduction of government stimulus.
“All that said, we are still on track for an uptick in transaction volumes this year – expected to reach 1.5 million, up from an annual average of 1m – 1.2 million over the last decade – which is great news for the business pipelines of mortgage lenders and brokers.”
David Whittaker, chief executive of Keystone Property Finance, said: “Housing demand may have cooled slightly in the past month, but all of the ingredients are there for prices to keep rising.
“The flurry of activity in the run-up to the end of the first phase of the stamp duty holiday has left significantly fewer homes for sale. In fact, Zoopla estimates that there are currently 26% fewer homes for sale now than there were last year – a situation that looks unlikely to rectify itself until 2022 at the earliest.
“At the same time, while demand has rolled back slightly, there is still fierce competition among buyers for the relatively small pool of properties on sale and sellers are achieving their asking price in many parts of the country.
“Marry all of that with record low interest rates and you have the perfect conditions for continued house price growth.”