Housing Supply Crisis is Worsening, says Rightmove
The shortage of supply on the housing market is worsening, says Rightmove.
The property portal has found that the number of new vendors has dropped 10.6% in the past year.
However, Rightmove reveals that demand is still high, with traffic and enquiries to agents both up 22% in June compared to June 2014.
The site also says that asking prices for properties new onto the market have reached another record high, rising 0.1% month-on-month to an average of £294,542.
Housing Supply Crisis is Worsening, says Rightmove
Demand is strongest for small properties with up to two bedrooms.
The amount of inquiries for small homes is 24% higher than for larger houses with three or more bedrooms.
However, the greatest decrease in supply is in the standard first time buyer sector.
Miles Shipside, Director of Rightmove, explains: “The greatest mismatch between demand and supply is at the lower end of the property ladder, as no doubt many buyers in this category would like to afford to buy a larger home, but have had to accept that it is out of their reach and downsize their aspirations to increase their chances of a successful purchase.
“The forthcoming extra tax burdens on buy-to-let investors may help to tip the balance in favour of first time buyers, but the consequent drop in rental property supply could push up rents.
“More supply of affordable starter homes for the growing demand from both renters and buyers is required, which means more new builds for both sectors to meet the country’s current and future housing needs.
“The challenge for Government, planners and developers is how best to ensure the right properties are built in the right locations and at more affordable prices.”1
Two agents have reacted to Rightmove’s revelations, noting high property investor activity in the lower price range.
Trevor Binch, Managing Director of Merrick Binch in Coventry, comments: “We’re finding that any properties on the market with us at under £150,000 – so your typical two-beds or some three-bed terraced – are selling immediately.
“There are a lot of investors snapping up these types of properties and this, coupled with the fact that a lot of sellers aren’t coming to market, is making the supply shortage worse.
“While there are some new developments being built in Coventry, there just isn’t enough to satisfy the demand, especially at the lower end of the market.”1
Donald Collins, Director at Go View London in Ealing, adds: “The natural consequence of a growing London population, young professionals trying to get on the ladder and investors looking for long-term investments, is a big shortage of two-bed properties coming to market.
“For properties we have on between £400,000 to £700,000, half of the interest comes from residential buyers and half from investors.
“The fact that investors have a long-term focus of building their portfolio and in many cases handing it down to their kids, means that these kinds of properties in the right locations won’t come back round on the market for about 15-20 years.”1
1 http://www.propertyindustryeye.com/supply-crisis-worsening-says-rightmove-as-new-instructions-dive/