Why Is The Housing Market So Busy Right Now?

It is no surprise that the search for space, instigated by the ongoing pandemic, along with the shift to working from home for many has altered house buyers’ demand and caused house prices to climb at more than four times the rate of flats. In fact, the average cost of a house rose by 5.2% over the last year, while the value of flats rose by just 1.1%.

More than 1.5 million homes are expected to change hands this year, a staggering 45% more than in 2020. The total value of homes sold is expected to reach £461bn, up 68% compared with 2019. Properties are selling within 45 days on average, almost three weeks faster than at the start of the year and the fastest pace Rightmove have ever recorded.

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Why Is The Housing Market So Busy Right Now?

The search for more space has been a key feature of the fast paced housing market during the pandemic, with several lockdowns prompting many people to carry out a reassessment of their homes and lifestyles. Having to spend more time at home has led to a need for more space, both indoors and out, particularly for families, those trying to homeschool and people who work from home.

Meanwhile, the stamp duty holiday has given further impetus for many to move as buyers have not had to pay tax on the first £500,000 of a property

This weight of demand has led to houses selling within an average of just 45 days, three weeks quicker than flats. More viewings which are happening sooner, also means the time it takes to sell has fallen. The average home went under offer after 49 days, down by two days compared to last year, marking one of the strongest starts to a year since 2015. The increases in first-time buyer and investor numbers means that first-time buyers viewed 65% of all homes sold in Q1 2021, while investors viewed 45%. Both figures are the highest level since the pandemic began.

Successive lockdowns and the shift in working patterns has had a multi-faceted effect on the housing market. On one hand, it has changed what people tend to prioritise in their homes, as they are becoming Furthermore, with workers being freed up from having to travel into the office every day, living close to work or good transport links becomes less of a priority.

With many companies planning to continue to offer flexible working to employees for at least part of the week, the housing market may be set to continue to be just as active for some time yet.

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What Is The Outlook For The Housing Market?

A member of the Bank of England’s Monetary Policy Committee said in a speech recently:

“The easing of lockdowns will continue to cause a natural fall in demand as people are able to see family and enjoy amenities that have been shut for more than a year.

“But new buyer demand will still emerge throughout the second half of the year as office-based workplaces confirm if they will be pursuing more flexible working practices,” Gilmore explained.

“Households who have the opportunity to commute less frequently have more options when it comes to choosing where to live, and this could prompt a move.

“Likewise, older households will continue to review how and where they are living, with many more set to move for the first time in years. 

“With an increased array of mortgages to choose from, first-time buyers will also remain active in the market.”

What Does This Mean In The Long Run?

The excess of buyer demand and too few homes for sale means that if you decide to sell, (particularly a family home), you are in a good position to secure a sale quickly. Coordinating the sale with the purchase of a new one might not be so easy though, due to the competition for properties currently on the market. However, more homes are expected to appear on the market as further lockdown restrictions ease and the vaccine roll-out continues.

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