U.K. Housing Shortage to Drag on Home Sales Into 2022
A persistent lack of homes for sale paired with unrelenting demand is set to forcibly slow the U.K.’s property market, according to a report from Zoopla. The number of available homes for sale was down 26.4% in July compared to 2020’s average level of stock, and plummeted even further, down 33%, when compared to the same time in 2018 and 2019—more typical years. With little abatement in sight, inventory is expected to remain low well into 2022. At the same time, sales surged 40%, a disparity that has pushed up the average home price 6% to £234,000 (US$320,824). “The post-pandemic ‘reassessment of home’—households deciding to change how and where they live—has further to run, especially as office-based workers receive confirmation about flexible working, allowing more leeway to live further from the office,” Gráinne Gilmore, head of research, at Zoopla, said in the report. Family houses, highly sought after for their typically larger square footage and outdoor space, have seen their availability most stretched and their prices rise most—7.6% over the last year, compared to 1.2% for apartments. The nationwide lack of supply, and especially for family houses, “means the market will start to naturally slow during the rest of this year and into next year, as buyers hold on for more stock to become available before making a move,” Gilmore said. A gradual rebuilding of housing supply is forecast for the first half of next year, with more typical market conditions expected to be ushered in by the ending of the stamp duty holiday and as buyers have to wait for more stock to become available, according to the report.
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