Category: Market Updates

This month several sources including Rightmove, Zoopla and On The Market have reported that the first half of this year has been the busiest ever recorded. The first half of 2021 has seen 140,000 more sales being agreed however this comes with a decrease of around 85,000 new listings making the supply and demand an ever-increasing issue within the market.

Homes with four bedrooms or more have faced the biggest surge with a 39% increase in sales and a 15% fall in houses coming to the market causing prices to rocket by 6.7%. Three bedrooms also jumped by around 28% while supply dropped by 10% again causing price to jump by around 6.9%.

For the fourth month in a row house prices have hit new record highs with a massive £21,389 (6.7%) on average added to your home in the last 6 months. The new average all time high is set at £338,447 and this month enjoyed yet another increase of 0.7%, this is the largest monthly rise since June 2007. This hive of activity is set to continue as Rightmove has calculated a shortfall of around 225,000 homes for sale, this shortfall has caused a buying frenzy fuelling the ever-increasing prices.

Several sources are predicting that despite the end of the main stamp duty relief activity will remain high in the housing market.

Interestingly the average sale of a property has now dropped to 38 days, in comparison to this time last year which was 74 days.

At Veritas Homes we continue to remain extremely busy both in the residential department and in the commercial department. Like most agents we are suffering now with a lack of stock having sold most of our properties to sell but we continue to provide the best and most personal service to all of our clients.

Nationally the price of property coming to the market has risen again by around 0.8% which is still the largest rise this time of year since 2015 which brings prices to a record high in all the regions and all parts of the country. The rise is still smaller than last month’s rise of 1.8% or Aprils mammoth rise of 2.1%. All this could be an indication of the pace slowing in what has been a hectic market.

Buyer demand continues to outstrip supply which means the markets size is constrained until the supply picks up. The number of sales that were agreed by estate agents in May was 17% ahead of the same period in 2019, which is a drop from the pace recorded in April where they were 45% higher. Than April 2019. The supply issue also sees stock levels at an all-time low with the average estate agent having 17 properties to sell falling even further from the record low of 19 per agent. This shortage in property means that the number of sales will be diminished until the supply is replaced.

West Midlands

Most if not all of the country is experiencing much of the same. In the West Midlands properties have increased in price by around 0.4% and looking in comparison to this time last year we have seen an increase of 9.5% bringing the average price of a property in the West Midlands to £255,419 which a property selling in around 39 days on average.

Below is a graph showing how the West Midlands compares to the rest of the country. The West Midlands is the fifth most expensive region in the country:

Below you can see how the rest of the country has compared in growth, monthly change and days to sell to the rest of the country:

Overview

Coming to the end of the month we see no signs of the markets slowing down. Average asking prices have increased yet again, this time by 1.8% increase on what was an all-time high only last month.

Prospective buyers are now faced with record prices for new houses coming to the market in all regions of the country except London. On a year-on-year comparison of May 2020 vs May 2021 we see Wales as the fastest-growing region by a massive 13% followed by the North West at 11.1% and even in the south of England the prices has increased by a huge 9.7% year on year.

The market also seems to have enough momentum to shrug off the impending end of the stamp duty holiday in England and Wales where buyer demand has soared by 52% in some places.

Sales completion forecast is set to rise to around 1.5 million. Buyer demand has been string since the end of the first lockdown last year as households reassess how and where they are living especially if there is now a need to work from home. Many older households are also re-evaluating their household needs and moving for the first time in many years. First time buyers remain very active in the market, with better access to mortgage finance.

The time between listing a property and securing a sale subject to contract has fallen by 10 – 15 days in the North West, Wales and Yorkshire and this is accompanied by the highest levels of price growth.

The graph below shows the significant increase in asking price over the time period since the market was suspended during the first lock down (Rightmove)

Average time to find a buyer has also dropped significantly over the last year from a peak in May 2020 with properties taking 88 days to sell (figures are probably effected by the previous two months of lockdown raising the average) down to nearly half of that last month with an average of just 45 days.

Record Highs as properties sell at pace

With a monthly price surge of 2.1% (+£6,733), the national average now stands at a whopping £327,797, this figure beats the last record recorded only last October at around +£4000. This big jump comes as buyer demand soars in most areas chasing the lowest amount of properties available on the market in proportion to buyers. According to Rightmove this is now officially the fastest selling market that they Rightmove have ever recorded.
 

Fun Facts for April 2021

• The average number of days to sell a property are the lowest on record.
• Two and three-bedroom semi-detached homes are the fastest-selling.
• During the month of March over 2 billion minutes were spent looking at property.
• The number of sales agreed is up by 55% compared with the same period around two years ago.
• Demand is up a staggering 27.5% whilst the flow of new supply is down -6.1%

 

Demand for homes

There has been a strong buyer demand since the start of 2021 leading to one of the busiest sales markets in years. Since March, demand has jumped again to levels like those last seen in the wake of the first lock down last summer. The combination of children returning to school and the stamp duty holiday extension announcement in early March as well as the return of first time buyers and the continued ‘search for space’ among homeowners came together to create a demand boost, especially for family homes.
 
Demand peaked in the weeks following Easter hitting levels double those of the same period in 2017 – 2019. After the first major easing of lockdown on the 12^th April in England, demand levels began to fall back as the focus switched from the housing market to catching up with family and friends.
 

What is happening in the Midlands?

The average price of a property in the West Midlands now stands at £226,948 in April 2021 according to Zoopla. This is a rise of 1.4% since January 2021 and a rise of 9.86% over the last 12 months. In terms of a breakdown of different types of properties, flats in the West Midlands sold for an average of £156,960 and terraced houses for £161,174.
 

Market Prediction

Buyer demand is likely to continue to ease throughout the rest of the year as the restrictions are relaxed even more, however we are still expecting levels to remain above average throughout Q2. However the supply/demand imbalance will remain. The ‘search for space’ among homeowners has further to run, especially as some office based businesses are now confirming that their work practices will change in the longer term. At the same time the roll out of 95% mortgage guarantee will mean more demand from first time buyers. UK annual price growth was at 2.1% at the start of the first lockdown, and is now at 4% after peaking at 4.5% in January. Prices will continue to be underpinned by the ongoing supply and demand imbalance with the strongest growth in the Midlands and up North. The scale of the growth is set to slow in the coming months especially as we move towards Q3 where the stamp duty holiday extension comes to an end and the government support for the economy starts to be pared back.