The number of homes available for sale has increased in March providing hope for buyers who have been hampered by low supply in recent months.
The latest data from Zoopla shows, whilst house prices have risen by 8.1% in the year to February, estate agents have also reported a 3.5% increase in their stock levels in March.
It’s a small rise – indeed the number of homes listed for sale is still 42% down on the five-year average – however, it will still come as good news to the many buyers who have been struggling to find homes to purchase.
For sellers, although the market is shifting slightly, they can be comforted by the fact demand for homes remains strong. Zoopla said buyer demand remained ‘unseasonably high’ across the UK at 65% above the five-year average and interest in family homes was twice as high as was usual for this time of year.
‘Subtle shift’
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “It has been a sellers’ market for so long that people expect their home to be snapped up by a ravenous pack of property-starved buyers, the second their property particulars are published.
“But there are signs of a subtle shift that could eventually make it much more difficult to shift your home.
“The Zoopla figures show that sellers are flocking to the market, with some keen to lock in property price rises while they still can.
“Meanwhile, although demand remains higher than usual for the time of year, it has fallen since the start of 2022. So, the balance of supply and demand is changing.”
First-time buyer opportunity
One group of people who will be pleased by the shift in demand are first-time buyers. Richard Hayes, CEO of Mojo Mortgages, thought the shift in supply presented a good opportunity for them.
“Another month of rising house prices is great news for current homeowners, and the rise in the number of listings across the country will be music to the ears of first-time buyers and those making their next steps on the ladder alike,” he said,
“Many first-time buyers will be familiar with bidding wars pushing offers well above asking price due to the limited number of properties coming onto the market – with more listings first-time buyers could see their chances of finding their first home at market price improve.”
But, he said, the increasing prices still presented challenges for new buyers. “Our recent research showed that first time buyers in cities such as Bath, Oxford and London would need to borrow more than seven times their salary to buy a typical house in each location,” he said.
“This highlights the challenge for those looking to get on the property ladder in some of the most in-demand urban centres.
“While some locations are much more affordable for first-time buyers, with those in Hull, Bradford and Gateshead needing to borrow less than three times the average salary, the wider cost of living crisis could make saving for a deposit more difficult.”
