RICS Residential Markey Survey: gap between buyers and sellers at its worst since 2013
Sarah Coles, personal finance analyst at Hargreaves Lansdown, comments on the RICS Residential Markey Survey for May, which shows gap between buyers and sellers at its worst since 2013.
Sarah Coles says:
“Buyers are getting increasingly desperate in their hunt for a new home, as the number of properties for sale continues to dry up. The imbalance between buyers and sellers is at its worst for seven and a half years, which is a recipe for price rises and panic.
“Agents reported surging house prices and bidding wars. One described the current situation as a pressure cooker building up steam. Another said that for the first time in 40 years, every single property on its books was either sold or under offer. In some places, this is becoming a vicious circle, as people are so worried they won’t be able to find anything to buy that they decide not to sell up.
“It’s an incredibly toxic environment to buy in, because bidding wars are a classic way of ensuring you pay over-the-odds and part with more money than you can afford. Buyers need to take real care not to get carried away. You need to bear in mind that prices won’t rise like this forever, and when the market calms, you need to be happy with your decisions.
“The agents expect prices to continue rising for a while, but there are some growing headwinds, and some are concerned that current prices aren’t sustainable. They expect demand to soften a bit when the stamp duty holiday is tapered at the end of June, and sales to flatten out as we get towards the end of the year. They’ve also been valuing more properties, which could mean more will be listed in the coming months, which would help rebalance the market.
“Once we get into the autumn, we’ll face the question of whether the economy will have recovered enough by the end of the furlough scheme to prevent job losses. If new variants mean a slower economic recovery, it could mean more job losses, which would have a knock-on effect on the property market.”
Kindly shared by Hargreaves Lansdown
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