Property shortfall and record prices – where will the market go from here?

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The UK has been riding high on the crest of a property market wave through the first half of 2021 with sales records broken and broken again. But with the end of phase one of the stamp duty holiday now a distant memory (like our heatwave!), is there a market slowdown in sight? John Simmons, Director at Miller Town & Country Estate Agents in Tavistock and Okehampton, gives us the latest on the local property market.

The first half of 2021 was red-hot for our local market without question – many new buyers entered the market following reassessment of where they wanted to live and what they were looking for in a home during the national lockdowns, and the added financial incentive of the stamp duty holiday eased the cash burden of purchasing a home. In fact, the June 30^th deadline drove a record 213,120 completions nationally in that month alone per HMRC, the highest since tracking began in 2005.

So does breaking records mean that the market wave has crested and is now going to lose momentum? We don’t think so, as the property market is, like all markets, driven by supply and demand. There are cash buyers knocking on the door as many were unable to secure that perfect property ahead of June 30^th due to the intensively competitive market, and demand for homes still far outstrips supply.

In fact Rightmove reports that there is currently a national shortfall of 225,000 homes, with the southwest of England experiencing the lowest level of properties on the market nationwide. This has also driven record house prices, with an average asking price in June of £338,447, 6.7% higher than just 6 months ago, and the highest ever monthly average price. We are still very much in a sellers’ market here in the Southwest.

The real issue now is finding homes for all the buyers out there. As Nathan Emerson, Propertymark chief executive says: “Sellers have seen the headlines about the huge demand and are nervous about joining the market and selling quickly with nowhere to go”. One piece of good news however is that many buyers for our local market are aware of the situation and more often than not can offer a great deal of time for sellers to find their onward purchases. Also of note is that even if sellers haven’t found their dream home when initially listing their home for sale, they are in control of pace through the whole process, so are under no obligation to sell until reaching the point of Exchange, adding in some breathing room for tracking down that new home.

A great tactic to enhance your chance of securing your perfect property given the high demand at the moment is one of coming to market in a ‘sell before you buy’ position – this may well give your offer on a home the edge over someone who is yet to sell. Plus, “if you wait to find a property before putting your house on the market, the likelihood is the property will already have been sold by the time you secure an offer” adds Emerson.

Your estate agent can help guide you through the best way to market your property and manage the sale process tailored to your individual situation, and at the same time be using their local market insights to help you secure a property to purchase at the other end of the transaction. There are definitely opportunities to be found in the current market, so go ahead, dip your toe in the water!