Housing supply halved in just 10 years, according to the latest report from the National Association of Estate agents. The report suggests that there were just 37 properties available per member branch in December 2015, compared to 72 in December 2005.
So, why is there such a shortage of supply?
Static top end
Britain has an aging population who are choosing to stay in their large family homes for longer and has resulted in less family-sized homes coming onto the market. This then filters down the property ladder, resulting in less property coming onto the market at every level. Stamp duty hikes at the top end of the market, which were introduced in December 2014, have also had a significant impact which has now filtered through to affect the number of properties coming to market.
Rising property prices
Low supply has contributed to rising property prices. This means that many first time buyers and lower earners are being priced out of the property market, creating more demand for rental properties. Rental property doesn’t have such high turnover, as landlords tend to hold on to properties significantly longer than domestic, owner-occupier purchasers, which again contributes to less coming entering the market.
Lack of choice
A lack of properties coming to market becomes a vicious cycle, as more people make the decision to improve their current home rather than moving to a new property.
A property shortage means home owners aren’t willing to take the risk of selling their existing property without finding somewhere else to move to, but equally, with such high competition for desirable properties that do come to market, home owners who have yet to sell their existing property are struggling to compete against chain-free buyers, as chain collapse remains a major factor in property sales falling through before completion.
If you find a property you do want to move to and have an existing property to sell, a professional home buying company like Quick Move Now could buy your property for cash in a timescale to suit your onward move.
This effectively makes you a chain-free buyer, and enables you to gain from all the benefits a chain-free purchase offers; including quicker timescales, less chance of the sale falling through, more power to negotiate on the price of your onward move, and less stress trying to coordinate two house sales and three separate parties.
The government has tried to ease the situation for first time buyers and get the property market moving, with incentives such as Help to Buy. This has been successful in creating more potential first time buyers, but unless there are properties available to buy, these incentives will remain unable to reignite the market.