Housing boom leads to significant stock shortage as estate agents run out of houses to sell

Housing boom leads to significant stock shortage as estate agents run out of houses to sell, according to the latest report from TwentyCi.

The number of houses for sale in the UK has reached an all-time low according to the latest Q1 2021 Property & Homemovers Report from property and data insight specialist, TwentyCi. Estate agency residential listings have dropped by 50 per cent compared to usual levels; leaving an average of just two months’ worth of stock on the books. There are currently 530 districts in the UK with property stock levels at under two months. Norwich is amongst the worst areas in the UK, where in NR5 there is just over one months’ worth of stock left.

The Homemover Wave 

With 387,673 householders currently saying that they want to move – an increase of two per cent on last quarter and an increase of 30 per cent since Q4 2019; demand is significantly outstripping supply.

The data reveals that the number of homemovers in the home moving journey has also rocketed, up by over 50 per cent year-on-year, with an additional 500,000 households entering, progressing, or completing the process of moving home. There are currently 360,082 households Moving Soon – a rise of six per cent since Q4 2020, whilst the number of new home owners Settling In has increased by a staggering 84 per cent since last quarter. The number of households Moving Now (265,024) and those that have Just Moved (311,083) have dropped slightly since last quarter indicating the delays being experienced in the conveyancing process due to the bouyant housing market accelerated by the Stamp Duty Holiday and the subsequent holiday extension.

Key indicators 

The stock shortage is further reflected by the increase in Sales Agreed (+33 per cent) and Exchanges (+55 per cent) and the drop in prices changes (-six per cent) and the number of properties being withdrawn from the market (-five per cent) since last year.  With demand exceeding supply there is less requirement for discounting, whilst less stock (new instructions are down year-on-year by two per cent) encourages buyers to remain in transaction rather than looking for an alternative.

Comments Colin Bradshaw, Chief Customer Officer, TwentyCi:

“The lack of properties coming to the market has the potential to jeopardise or temporarily cause a slow-down in the market. Keeping the levels of residential stock to purchase sufficient to satisfy the continued surge in buyer demand, on the back of government stimuli and pandemic induced work and lifestyle changes, is critical to help maintain the economic recovery. Not least due to the value of homemovers to the economy. Homemovers contribute £12 billion to the economy each year delivering more than three per cent GDP. Our direct experience of the categories closely aligned to a home move means this equates to the purchase of over 100,000 beds, 160,000 sofas and nearly 70,000 dining tables.  Clearly, these consumers are an incredibly valuable group of customers for many organisations across a wide range of sectors – from retail and home improvements through to financial and insurance companies.”  

Average asking prices 

Average asking prices across the UK have risen by £13,000 over the last 12 months to £366,000, an increase of four percent. Every region has experienced an increase with Yorkshire and The Humber recording the highest rise (21 per cent). Conversely, Inner London saw the lowest increase at less than one per cent, reflecting the national desire for more space as a result of lockdowns and the need to work from home.

Property characteristics 

The residential property market is buoyant across all types of property – flats, terraced houses, semi-detached and detached. The largest increase in Sales Agreed is for detached properties, which are up by 37 per cent year-on-year, indicative of the “middle England, middle income” cohort changing their circumstances.

Sales by region 

The South West of England has recorded the highest rise in Sales Agreed (39 per cent), followed by the Northern Ireland with a 37 per cent increase. Peterborough recorded the highest Sales Agreed for major cities with a 48 per cent increase year-on-year.

Lettings 

The lettings sector continues to remain suppressed as the demand for urban living with shorter commutes is replaced by more flexible locations and a shift for those able to join the property market rather than renting. The average asking price across the UK in Q1 2021 was £1,331 per month, a fall of two per cent.  All areas except London have seen a drop in demand. The South West has recorded a fall of 19 per cent year-on-year, whilst in comparison Inner London has seen rental volumes soar by 35 per cent.

Hybrid/Online agents 

The market share of hybrid and online agents has remained at eight per cent, a figure that has now remained stable for two years. Despite an initial surge in penetration during Lockdown #1 when High Street agents were closed, hybrid/online penetration did not increase during later lockdowns and restrictions.

However, the sector has seen an improved level of penetration into properties of greater value, a trend that was observed throughout 2020. Hybrid and online agents have seen a 28 per cent rise in New Instructions in the +£1,000,000 price bracket since the same time last year. This is driven by both an increase in average property price and the buoyant market.

All areas of the UK other than Scotland (-six per cent) recorded a growth in New Instructions in Q1 2021 with penetration into Inner London (23 per cent) and Outer London (16 per cent) and the North East (41 per cent) most notable.

High Street Consolidation 

Q1 2021 has seen a significant change with the acquisition of the Countrywide Estate Agency group by Connells Estate Agency group, which now represents over nine per cent of all New Instructions, 2.5 times larger than their nearest rivals.

Kindly shared by TwentyCi

Main article photo courtesy of Pixabay