Demand in the housing market is continuing to outweigh supply. For the past couple months, momentum in the sector has been building, causing demand to skyrocket.
The UK housing market is keeping up a fast pace with strong demand from buyers and investors. The sector is seeing the strongest spring season for sellers in 10 years. The ever growing demand from buyers continues to outstrip the number of properties on the market.
Currently, nearly two out of every three properties listed on Rightmove are sold subject to contract. In March, the number of new properties coming to the market increased by 51% compared to February. However, demand is continuing to outstrip supply in many areas across the UK.
UK housing market reaching record-breaking levels
As homebuyers and investors are flocking to property portals, there have been numerous record-breaking days already this year. This year Rightmove has already recorded 20 of its busiest days ever in terms of visits to the site. During March, time on the website surpassed a whopping 2bn minutes in a month for the first time.
A new record was set on Wednesday 7 April when the portal had more than 9.3m visits. Additionally, on the day before, there was a new record for the number of people sending enquiries to agents about properties on the market. This beat the previous record set on Monday 22 March.
Tim Bannister, director of property data at Rightmove, comments: “In a traditional year there would be a couple of record days for visits or enquiries being sent by home-hunters, but the pace of the current market caused by a combination of restrictions easing, a desire for more space and people considering different locations, has led to records tumbling week after week.”
What’s behind this surging level of demand?
There are many factors causing this strong level of demand. The Spring Budget at the beginning of March boosted the housing market. During the days following the announcement, the stamp duty holiday extension and mortgage guarantee scheme created a 24% spike in buyer demand in England and Wales, according to Zoopla.
With more first-time buyers and home movers entering the market, the housing sector is seeing some of the strongest levels of demand ever seen. With lockdown restrictions lifting, pent-up demand is releasing. Additionally, the success of the vaccination program is bringing more confidence to the sector.
The successive lockdowns of the past year has also caused many people to reassess their housing priorities. Many are in search of more space and properties that fit better with their new work-life balance.
Since the beginning of 2021, average buyer demand levels increased by 13% more than average levels across all of 2020. This is particularly of note as last year turned into a particularly strong year for the housing market.
What’s ahead for the housing market?
Recently, there has been a rise in supply. However, overall supply levels still remain subdued. Zoopla believes more pent-up supply will come back to the market as lockdown restrictions ease and the vaccination program continues successfully. And the housing market will likely become even busier in the coming months.
Gráinne Gilmore, head of research at Zoopla, states: “The prospects for the housing market over the next year have improved on the back of the Budget. The continued search for space, the stamp duty extension and mortgage guarantees will support activity levels and headline house price growth up to the end of June.
“We still expect house price growth to moderate later in the year, but overall transactions are set to benefit from an additional boost following the stamp duty extension and tapering.”
