Low Supply Of Stock For Sale & Rent

Low Supply of Stock for Rent and Sale - What this Means

The Royal Institution of Chartered Surveyors recently revealed that over the past 9 months, there was a -14% fall in new house listings. This was despite a significant rise in new buyers. It’s believed that this is the reason why house prices are now rising. The same goes for the rental market, too. We expect this to cause a few problems with people who are looking to move in future. To kick-off, energy costs are set to rise. Then there’s the fact that wages aren’t tipped to increase either. On 1st glance, it seemed the housing market was benefiting from one of many positive aspects of the pandemic. After all, people aren’t going abroad as much, so are saving more cash. Plus, many of us are seeking more roomy properties out in the sticks or by the coast. After all, much of our work, rest and play have been at home. But on the flip side, it might not all be bad news. COVID restrictions won’t be here forever. This could cause supply and price growth to improve as a result.

Could First Time Buyers Affordable Housing Turn Things Around?

Yes! In fact, first-time buyers are, without doubt, the most important sector of the UK housing market. So, why is this? Well, it’s more of a consequence of moving home than anything else. For someone who is considering selling their first home, chances are they’re moving to a bigger place. This has a knock-on effect on the economy. Things like furniture sales increase, plus the demand for new starter homes. In short, first-time buyers are crucial for improving the property market. With this in mind, what is our government doing to support first-time buyers? There was the Help to Buy Scheme for a while. Plus, more recently, lifetime ISAs and shared ownership schemes. These schemes are effective. But, with many barriers 1st-time buyers face like high prices, stagnant wages and high costs, is the government doing enough, especially in London? Demand for first properties will always be there. Population rates are always increasing, and employment prospects are improving. But if first-time buyers are forced to rent, sellers then can't move. The downward economic spiral begins.

Are Home Buyers Likely to Struggle Finding Property Soon?

In some parts of the country, it could be a little tight, but don’t let this dishearten your search! In places like Hammersmith, a small proportion (5.7%) of properties are selling within 2 weeks of being listed. Elsewhere, there is a lack of stock. But 2022 looks promising, as more people are set to sell as they come out the other side of COVID. With more people desiring larger or more rural properties, along with enticing interest rates, things are set to improve. If you’re thinking of selling, don’t put your plans on hold. Our advice - keep looking! What’s the Solution to Low Housing Supply?

There are a couple of things the UK government has already done to provide more housing stock and create more favourable conditions for first-time buyers. To begin with, they provided a stamp duty holiday back in 2021. This enabled more landlords to invest in property, providing some relief to tenants. Additionally, multiple priorities have been set for this year. Affordability checks have been re-assessed, and stress criteria for mortgages could even be eliminated. A new scheme was also introduced in May 2021, helping first-time buyers.

The governments ‘Green Agenda’ also aims to make domestic properties more energy efficient. On the flip side, the government still has a long way to go. With regards to the buy to let market, landlords should be encouraged, not discouraged, from investing.

Another big problem that needs addressing is the ‘cladding crisis’ born from the aftermath of Grenfell. The government has committed to £5 billion of funding. But, considering that remedial work could, in total, cost up to £50 billion, this is nowhere near enough. Of course, Michael Gove did propose to charge developers £4 billion to make the necessary changes.

But this doesn’t take away the issue of the mammoth bills that leaseholders may accumulate from doing their own upgrades. In short, a much fairer system is required in future to protect leaseholders.