"The resurgence of first-time buyers, using 95% LTV mortgage guarantee products, is further constraining available supply."
Fuelled by the enduring ‘search for space’ that emerged during the pandemic and shaped the market over the past 12 months, the rate of property sales has also doubled.
One in every 50 homes was sold between 1st January and 15th April, up from one in every 100 homes during the same period last year. Running ten weeks ahead of a typical year, this level of sales wouldn’t normally be achieved until the end of June.
However, acute market activity is eroding the volume of homes for sale, with the total number of homes available to buy (and not yet under offer) down nearly 30% in the first half of April compared to average levels in the same period during 2017-19.
Buyer demand peaked in the week following Easter, at double the levels of the same period in 2017-19, and is currently up 27% in the year to date compared to the average levels in 2020 - despite the acceleration of demand recorded during the pandemic.
However, since the first stage of lockdown easing on April 12th in England, buyer demand has fallen back slightly.
The total number of homes listed for sale in the year to date is 19% lower than average levels recorded in 2020 - this is despite a 50 day market closure in England (and longer in Wales and Scotland) last year when little-to-no new stock was brought to market.
Three and four-bedroom houses have recorded the biggest annual drop in supply - reflective of buyer demand for more space and an overall trend in homeowner appetites to upsize.
House price growth tracked at 4% in March of this year, down from 4.5% recorded in January of this year. While this indicates a slight softening in pace of growth (and the slowest rate of growth since October), house prices remain almost double the 2.1% growth recorded in March 2020, upheld by lack of supply coming to market.
David Ross, managing director of Hometrack, commented: “Behavioural changes associated with the easing of lockdown - children returning to school, people getting more comfortable having buyers view their homes - has led to an increase in the number of family homes being listed for sale.
“But, it’s not enough to match the appetite in the market for extra space. Houses currently make up 59% of properties listed - that’s down from 76% in 2017.
“The resurgence of first-time buyers, using 95% LTV mortgage guarantee products, is further constraining available supply. All of this continues to support price growth in the short term. Though it has moderated slightly this month, it’s still the fifth month in a row that annual growth figures have sat at 4.0% or above.”
