The monthly supply of available property remains vastly below normal expectations in all regions, down -37% compared to May 2019, with the East of England worst hit by scarcity.
According to the latest data from Home.co.uk, total stock of property for sale in England and Wales has set a further all-time low of 279,019, 31.6% lower than in June 2020 and 41.0% less than in June 2018. Greater London has also shown the first month where supply has fallen below expectations - down 7% compared to May 2019.
As the home-buying frenzy continues apace, with buyers feverishly grabbing what little sales stock remains available, the typical time on the market for unsold property in England and Wales is now just 76 days. This in turn is driving up demand and asking prices, with every English region and Scotland reporting an increase since last month and the largest hikes in the East Midlands (+2.1%), South West (+1.7%) and East of England (+1.5%).
However, the London sales market remains relatively slow and lack of demand due to COVID has suppressed prices, especially in more central areas.
The London rental market, on the other hand, looks like it may have turned the corner after a disastrous performance during 2020 and the first quarter of this year.
Significant rent rises over the last three months and a slowdown in supply indicates that demand is returning. Should this recovery continue, improving yields will help support the recovery of the London sales market going forward.
Scarcity continues to push up prices and rents in most parts of the country. The supply of new instructions remains surprisingly low compared to pre-COVID levels (down 37% in May 2019 vs. May 2021). Normally in such a hot market, potential vendors would rush to sell in order to cash in on frothy pricing. Not this time around, it seems, and the most likely cause of this reticence is the vibrant rental market that has a voracious appetite for new lettings stock.
Double-digit rent rises and low void times are luring many owners to hang on to their properties and let them out instead. The regional picture continues to evolve.
The northern regions are no longer the growth leaders in the sales market, having been overtaken by even more rapid price rises in recent months in the East Midlands and East of England.
Annualised home price inflation now tops 11% in these regions, supported by paltry supply. The tapering off of stamp duty next month will likely dampen demand in the sales market but will do little to affect the dearth of properties entering the market. As a result, Home.co.uk say they expect that prices and rents will continue to rise in the near term.
The annualised mix-adjusted average asking price growth across England and Wales is currently +9.0% and further increases look inevitable; in May 2020, the annualised rate of increase of home prices was just 0.8%.