The real estate market is facing the biggest shortage of new advertisements since 2015, real estate portal Zoopla warned.
While buyer demand remains strong, inventory levels are down more than 26 percent from last year’s average, leaving potential buyers competing for the most in-demand properties.
The total number of homes is also 33 percent lower this time of 2018 and 2019. One in 20 homes in the UK changed hands in the past year, compared to one in 25 two years ago.
Low inventory levels: The real estate market faces its worst shortage of new listings since 2015, new findings from Zoopla have revealed
Supply problems are worst for houses priced up to £350,000, which Zoopla says “reflects where average affordability lies” for buyers.
“It is the supply of three and four bed family homes that has been stretched the most,” the report added.
“The narrowing of choice of homes to buy, especially for family homes, means the market will naturally slow down for the rest of the year and into the next year as buyers wait for more inventory to become available.
“While we expect a strong start to 2022 in line with seasonal trends, inventory will slowly recover through the first half of the year.”
The average time between offer and an agreed sale is now 26 days, up from 49 days in 2019.
Problematic: demand in the real estate market exceeds supply
While the average flat in the UK has increased in value by 1.2 percent in the past year, the average home has increased by 7.6 percent over the same period, according to the data.
Increased activity among startups and investors is also absorbing inventories, while failing to replenish them.
This huge “demand-supply mismatch” is driving property prices in many parts of the country, according to Zoopla.
On an annual basis, real estate prices rose 6 percent in July, slightly lower than the 6.3 percent growth rate in the year to June. The average value of a home in the UK is now £234,000.
Overall growth is expected to “moderate” slightly to about 4 or 5 percent by the end of the year, Zoopla said.
Price spikes: The strongest increases in house prices are in areas with below-average values
The rise in prices was expected to subside in certain areas as the impact of the stamp duty holiday fades and the government withdraws stimulus packages such as the leave scheme.
At a regional level, property price growth was highest in Wales and Northern Ireland, both of which have shown annual property price growth of over 9 percent.
Prices have also risen sharply in the northwest of England. At a city level, Liverpool continues to lead the way with a price increase of 9.4 per cent over the past year resulting in an average increase of £11,731 per home.
Property prices in Manchester and Belfast have risen more than 7 percent in the past year, while prices in London have risen by just 2.5 percent.
Gráinne Gilmore, head of research at Zoopla, said: ‘The post-pandemic ‘re-evaluation of the home’ – households deciding to change how and where they live – needs to move forward, especially as office workers get confirmation about flexible working, which frees up more space. is to live further from the office.
“This means there will still be higher demand and potential sellers looking to sell single-family homes could be in pole position.
However, the lack of supply, especially for family homes, means the market will naturally slow down for the rest of this year and next, as buyers wait for more inventory to become available before taking a step.
“As we move into 2022, the year will start strongly in line with seasonal trends, but after that a return to more usual activity levels among novice buyers, the effect of the end of the stamp duty holiday, and some buyers waiting for more inventory becomes available will lead to a slow recovery of inventory levels in the first half of the year.’
Zoopla pointed out that the supply of new-build homes, which has slowed temporarily due to the interruption in the construction sector during the first lockdown, has also continued to decline by 11 percent in England.
Fast: Average time it takes to sell a home has fallen, Zoopla’s latest findings show
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