Rightmove data shows there is a surging level of demand in the UK housing market, making for one of the strongest starts to the spring season. What does this mean for buyers and sellers?
A record number of prospective buyers are enquiring about properties on Rightmove. Demand in the housing market is 34% higher than the strong pre-lockdown market from a year ago. At the same time, supply is remaining low.
Currently, the growing demand is outstripping the number of homes on the market. This is happening by the most substantial margin at any point over the past decade. The current market conditions is making it one of the best sellers’ market of the past 10 years.
Asking prices are on the rise
The average asking price of a property going up for sale has increased by 2.7% in the last 12 months. This has increased the national average to £321,064. Additionally, asking prices grew for the second month in-a-row. A rise of 0.8%, or £2,484, was recorded in March.
Fewer properties are being put on the market. However, the number of sales agreed in the first week of March was still 12% higher than a year ago. Nearly two out of three properties currently on estate agents’ books are sold subject to contract.
Rightmove’s resident property data expert Tim Bannister says: “Whilst it is unfortunately not the perfect time to buy for some people who have been adversely affected by the pandemic, the record buyer demand measured by Rightmove indicates that now is the right time for many.”
With such a strong number of sales agreed in recent months, there is a shortage of homes available to purchase. In February, the number of new listings dropped by 20%. However, more properties are starting to be put up for sale.
Greater supply would ease the upwards pressure currently on house prices. There are early signs that more people are putting their properties on the market. This will likely pick up once the lockdown restrictions start to ease.
“Blossoming buyer demand coinciding with blossoming gardens should put a spring in the steps of sellers, and more of them coming to market will provide a much – needed increase in the choice of property for the many who are looking to buy,” Tim Bannister explains.
What’s behind this growth?
Measures announced in the Spring Budget, which included the stamp duty holiday extension and the mortgage guarantee scheme, has boosted the housing market. Since the day of the announcement, Rightmove has seen a spike in online property searches.
Tim Bannister comments: “Concerns of a cliff edge for the housing market at the end of March have dissipated, partly due to the tax deadline extensions in all of the UK bar Scotland. Strong buyer demand will be further boosted from April by the new Government guarantees enabling lenders to return to the widespread availability of 5% deposit mortgages.”
“Record low interest rates and the new focus on what your home needs to offer after several lockdowns have led us to the greatest excess of demand over supply in the last ten years. This strong sellers’ market is good news for those who are looking to put their home on the market as the traditional Easter selling season approaches.”
Will this strong demand lead to delays?
There has been a backlog of property transactions due to the stamp duty holiday. It was welcome news for many that the stamp duty holiday was extended and given a tapering end. However, the strong buyer demand is expected to continue to cause delays. Lenders, conveyancers and surveyors have been under pressure to keep up.
Comparison website GetAgent recently revealed the average time it takes to accept an offer is down by 14 days. However, it’s taking an additional 43 days longer to sell a home. GetAgent looked at the time it takes from the initial listing to Land Registry recording the sale as complete. The data show it’s now taking an average of 295 days to sell a home.
Colby Short, founder and CEO of GetAgent, comments: “It’s now taking more than six weeks longer to complete a sale than it was the previous year and this can feel like an eternity as anyone who has bought or sold a house will tell you.
“Unfortunately, there isn’t much you can do to bypass this backlog other than sit tight and be patient. At least, at present, those currently delayed will have the reward of thousands saved in stamp duty when they do finally come to their completion date.”