
"Considering the end of the £500,000 taper for stamp duty next month, mortgage holidays winding up in July, and potential for international travel, we may see demand start to cool off "
As a result, respondents to the survey highlighted this mismatch between supply and demand to be a critical factor in driving up house prices, with growth reportedly accelerating further across all parts of the UK.
Respondents reported a solid uptick in buyer demand and an increase in new buyer enquiries. Alongside this, newly agreed sales also rose over the month, with near term sales expectations remaining comfortably positive at the national level. With regards to the twelve month view, contributors anticipate a cooling in sales growth further ahead, with the headline net balance standing at just +12%.
A widely cited theme in the comments left by survey participants is that the number of fresh listings arriving on the market is insufficient to match the current levels of demand. The net balance for new instructions fell to -4% in the latest results, down from +21% previously. Moreover, stock levels have dropped in recent months, with the average number of properties on estate agents’ books now at just 40, having briefly stood at 46 back in December.
The survey’s headline measure of house price growth rose again over the month, with a net balance of +75% of respondents noting an increase in prices during April. This is up from a reading of +62% back in March and has now become successively more elevated in each of the last three reports. Furthermore, all UK regions/countries are now seeing a sharp pick-up in house price inflation.
Looking ahead, the near term price expectations net balance came in at +47%, marginally higher than the reading of +43% posted last time, and still consistent with strong house price growth being maintained over the coming three months. Further ahead, respondents also foresee upwards pressures on prices remaining firm at the twelve month time horizon.
Sundeep Patel, director of sales at Together, commented: “After a more cautious start to the year, the latest market activity survey paints a very different picture, with sellers enthusiastically listing their properties and buyer enquiries and sales activity indicating a continued uptick in buyer demand.
“That said, considering the end of the £500,000 taper for stamp duty next month, mortgage holidays winding up in July, and potential for international travel, we may see demand start to cool off and the market start to settle.
“As we begin to hopefully get a view of what life will look like past the peak of the pandemic, and a sense of 'normality' returns, more needs to be done to address the shortfall in property supply which continues to push up both house prices and rental fees. However, with the Government’s new Planning Bill aiming to spark a surge in regional housebuilding, there may be increased opportunities for hopeful first-time buyers within the next few years. Specialist lenders can play a key role in supporting home-buyers’ property aspirations as we expect there to be more demand for flexibility post pandemic, to meet borrowers’ evolving circumstances."
Nigel Purves, CEO of Wayhome, added: “The momentum of the housing market continued to accelerate in April, with a solid uptick (+44%) in buyer enquiries. In addition, house price growth leapt ahead in April, with a net balance of +75% reporting a lift in prices, up from +62% in March. Demand for new homes continues to outpace supply, which has led to increased competition between buyers looking to make their next move.
“While the Government incentives – including the stamp duty holiday and 95% mortgage guarantee – have boosted consumer confidence recently, there are still affordability concerns for a large proportion of aspiring homeowners.
“It’s positive to hear of the new proposal set out in the Queen’s speech, which will go some way towards tackling and modernising the UK’s planning systems and facilitating more new-builds within the next few years. However, what the industry should be focused on in the immediate term is ensuring people are not out-priced by the market and are able to access desirable homes through a wider range of affordable options.