According to TwentyCi‘s newly released Property & Homeowner End of Year Report 2021 the UK is running out of properties, as we have only 2.5 months’ worth of stock left.
2021 has seen a 6% reduction in available residential properties. At the same time, the number of agreed sales has risen by 13% and the number of contract exchanges has risen by 28.7% And this has meant, 2022 has continued to see very low levels of available properties on the market.
With so few houses up for sale, would be sellers are stuck, as they struggle to find an onward purchase. As a result, there is still a considerable lack of properties to buy.
But London Isn’t Running Out Of Properties
In England and Wales, except London, there is now only between 2.2 and 3.1 months’ worth of housing stock available. This is almost half as much as historical norms.
Only London seems to be bucking the trend.
Inner London has 79% and outer London 32% more properties available to buy compared to 2019. In stark contrast, South West and North East of England have 20% and 25% less available stock respectively than before the pandemic.
The West midlands has only 2% less stock, whereas Yorkers and The Humber has a property stock deficit of 10%. Wales level is 3% below the numbers of 2019, Scotland is at the same level as before the pandemic.
At the start of the pandemic, London was the most affected area of the country, with people looking for more indoor and outdoor space. But now the capital is the only area where housing stock levels are up.
This difference between London and the rest of England and Wales is also the reason, why flats are the only property type that of which more is available, by 50%.
Houses And 3+ Bedrooms Are At Significant Deficit
While a good availability of flats are on the market, due the good stock levels in London, we are running out of properties of other types. This is probably due to the fact, that at the start of the pandemic, flat owners wanted to make the move to a house with more space. There are 11% less terraced house, 18% less semi-detached houses and 26% less detached houses.
This is also reflected in the number of bedrooms available. There are 59% more 1 bedroom properties available. Again, this is due to the good stock levels of flats on the market.
2 bedroom properties are up by 15%. 4 bedroom properties are at the lowest level, with 20% less stock available than in 2019.
First Time Buyers Most Affected
While 2021 has seen 35% more first time buyers compared to the previous year, this is unlikely to be repeated in 2022. Because it seems that we are mostly running of properties in the price range of first time buyers.
There are 13% less properties on the market for the price range £0 to £250,000. Affordable housing has therefore decreased And only 1% more properties for the range £250,000 to £500,000.
The higher price ranges show a good level of stock available, with 20% more properties on the market for £500,000 to £750,000. At the highest price range, £750,000+, there are 37% more properties available than before the pandemic.
The higher stock levels for higher value properties are due to the London stock levels being up, because house prices in London are higher than in the rest of the UK.
What Is Likely To Happen In 2022
So will we be running out of properties to buy in about 3 months’ time?
The outlook remains extremely uncertain. The strength of the market surprised us all in 2021 and could do so again next yearRobert Gardner, Chief Economist at Nationwide Building Society
There is a chance that the increase in borrowing costs and the rising costs of living will reduce the demand in 2022, which could calibrate the market.
There are also signs that more properties will come on the market soon, as home valuation requests were up by 44% in the first week of January 2022, according to the newest House Price Index released by Rightmove.
It’s difficult to predict what will happen with the housing market in 2022, but it is unlikely that we will see the same as last year.
2021 was a remarkable year for the housing market, underpinned by a strong economic recovery, widespread reassessment of housing needs, ultra-low interest rate environment and, for the most part of the year, a stamp duty incentive. It will be difficult to replicate these market conditions throughout 2022.Lucian Cook, Head of Residential Research at Savills