The housing market surprised us all by prospering during the pandemic, but while estate agents, surveyors, mortgage lenders, conveyancers and others at the industry’s coal face are still run off their feet, frustration is growing due to a chronic lack of stock.
This shortage of homes for sale is causing problems for both buyers and sellers and is an issue in both affluent and more affordable areas. The latest report from Hometrack reveals that the number of homes being listed for sale has not kept pace with buyer demand for most of the last 12 months, eroding the total number of properties available in most markets, with a particular drop in the availability of family houses.
In the first half of April, the number of homes for sale was nearly 30 per cent lower than average during the same period in 2017-2019. Hometrack says the lack of supply has been exacerbated by a rise in first-time buyers who have been saving in lockdown and have nothing to sell.
Estate agent Simon Wright, of Carter Jonas Harrogate office, notes that one of the big problems is that would-be sellers can’t find anywhere to move to so they are reluctant to put their own home on the market. “What they don’t realise is that to get the house they are looking for, they have to be in a position to buy so it’s a Catch 22,” he says.
His advice for those playing a waiting game is simple: “You have to put your own home up for sale to be in the market to buy. It doesn’t commit you to selling immediately. “We are seeing more situations where people agree to exchange contracts but delay completion for a period of time that can be up to six months. Not everyone will agree to that but it is an option for some.”
The alternative is to sell and move to temporary accommodation, though that is also becoming difficult because there is a shortage of rental properties. But Simon adds: “People will make it work if they get a good price for their own house because it puts them in prime position to buy.”
Toby Milbank is a buying agent, otherwise known as a property finder, and has seen demand for his services rocket. Co-founder of Yorkshire-based The Search Partnership, he says: “We have had a lot more people asking for our help in finding them a home because there are a lot of frustrated buyers out there.”
The only silver lining to the cloud cast by low stock levels is that buyers and sellers are much more committed to a sale so deals are less likely to fall-through and insultingly low offers are rare. “There are no unsavoury practices because there’s no point in a buyer getting clever as the vendor will just sell to someone else,” says Toby, who adds that being ready to pounce on a property is vital.
He says that many estate agents have sold 75 per cent of their stock in the last three months, leaving buyers to fish in a small pond.The North Yorkshire market in particular is red hot and it’s not just the usual Golden Triangle hotspots.
“I wouldn’t be surprised if the Land Registry figures show that house prices in North Yorkshire have risen 10 per cent in the last six months compared to an average annual rise of 2.5 per cent over the previous 10 years,” says Toby. “People are also broadening their horizons now that more of them only need to go into the office twice a week now. They want somewhere with pretty countryside and good wi-fi but not too remote. They are expanding their search east of Malton, north of Thirsk and out round the edges of the North York Moors.”
With interest rates low, Toby doesn’t see the supply and demand issue easing anytime soon. Hometrack agrees and says: “Given the myriad factors boosting the appeal of moving, buyer appetite will remain above average levels. The supply/demand imbalance will remain.
“The search for space among homeowners has further to run, especially as some office-based businesses are now confirming how their working practices will change in the longer-term.
“More flexible working arrangements open up new opportunities for homeowners to move to a different location. At the same time, the 95 per cent mortgage roll-out will mean more demand from first-time buyers.”
Estate agent Simon Blyth is more optimistic and believes we will see supply rise. He says: “I think a lot of people are waiting for the leaves and flowers to come out so that their garden looks its best before they put their property on the market.
“If the weather is sunny in the next couple of weeks or so I think we will see a lot more homes listed for sale.” He also reiterates what his fellow property professionals have said about would-be sellers who decide to hold back until they spot something they would like to buy and says: “You have to be in the race to win it.”