Demand for Properties Outstripping Supply as Housing Market Outpaces 2020 Performance

Figures published in January show clear evidence that the demand for properties in January 2021 has outperformed the same period last year. Demand for homes is up 13% on the same period last year, with an 8% increase in new sales agreed. But with a drop of 6% in available properties, house prices are rising almost uniformly across all English regions with the greatest impact felt where house prices are currently lowest.

Robert Burdett, MD at James Leigh Property Management said: “We’ve seen a quick start to 2021 despite the latest lockdown encouraged by the stamp duty holiday. The Coronavirus pandemic continues to drive moving intent amongst buyers, but the latest lockdown has meant that sellers remain cautious despite the fact that the housing market has remained open.”

The availability of properties coming onto the market has slowed compared to this time last year, falling 12%. And with the end of the stamp duty holiday at the end of March, there is likely to be a brief slowdown as the race to complete existing purchases slows new business in the market temporarily.

Robert Burdett said:, “We don’t expect the market to grind to a halt as the stamp duty holiday comes to an end, but we do expect a brief slowdown in transactions during Q2 as people race to complete existing purchases. A short extension to the stamp duty holiday could mitigate this slowdown.”

Data published by Zoopla shows that the housing market performed strongly during 2020, with a 47% increase on 2019, defying expectations. However, average completion times have extended by around two weeks to just under four months, which is unsurprising considering the restrictions on movement throughout 2020 and early 2021.

Robert Burdett said: “The housing market has performed strongly during 2020, significantly higher than 2019, despite the movement restrictions and economic turmoil caused by the Coronavirus pandemic. And despite the expected temporary slowdown in Q2 caused by the expected end of the stamp duty holiday, the indications for continuing strong growth remain extremely positive.

“The Governor of the Bank of England has indicated that he expects the economy to bounce back strongly, and this is a further encouraging sign that growth in the housing market will remain strong during 2021.”