Plummeting stock levels continue to bolster house prices and rents

Property stock levels in England and Wales have continued their downward trajectory to a new record low of 265,774. This is now 38.8% lower than in September 2020 and 45.0% less than in September 2018.

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Property Reporter
17th September 2021
For Sale 115

The dwindling stockpile and below expectation of new instructions (-40% compared to August 2020) are keeping both house prices and rents high as the market shows further signs of slowing ahead of the final stamp duty holiday deadline at the end of the month.

According to the latest research from, new instructions in the South East are the worst hit (-49%), while Greater London, formerly plagued by vast oversupply, indicates a further drop in the number of new instructions (down 48% compared to August 2020).

Moreover, London now shows a return to strength with rising demand and reduced availability of both rental and sales stock. Scarcity is driving up rents across the UK and supply is continuing to fall rapidly. The total stock of property for sale indicates a record low in the history of this index and the trend suggests that it may not fall much further.

Meanwhile, the supply rate of new sales listings remains consistently low across all English regions, Scotland and Wales, more than compensating for any reduction in demand owing to the end of the stamp duty holiday.

The turnaround in the London lettings market is truly remarkable. In merely a matter of months, the market has swung from a tenant's market to that of a landlord's market. Rents are soaring in the more central boroughs and supply continues to fall, suggesting that rent rises will continue for the rest of this year and perhaps into next.

The return to growth in rents is also boosting demand in the London sales market. It's worthy to note that the 5-year growth in London asking prices is equivalent to the 6-month growth (both 2.8%) and a clear indication that there is plenty of room for further growth, especially in such a low-interest-rate environment.

The total sales stock total in London continues to fall and is now down by 17% since the oversupply peak in Nov 2020. Moreover, the supply rate of new instructions has dropped 48% compared to August last year, when urban flight triggered a wave of panic selling. Given that yields on rental properties are improving rapidly, we firmly expect demand to increase as investors eye opportunities in this formerly troubled market.

Across the UK, scarcity continues to push up both prices and rents. The number of new instructions entering the sales market continues to be very low compared to pre-COVID levels (down 16% August 2021 vs. August 2019). The number of newly available rental properties entering the market is also down considerably across the UK (down 35% August 2021 vs. August 2020).

According to, the East of England and the East Midlands are now the top performers in terms of regional price growth, with annualised home price inflation of 12.1% and 10.1% respectively, supported by considerable residual demand and a dearth of supply. The tapering-off of the stamp duty holiday will have dented buyer demand in these and other regional sales markets, but it appears that supply and mortgage rates falling faster are ensuring that most parts of the UK remain a seller's market.

Our outlook is that prices and rents will continue to rise in tandem in this highly inflationary environment, but perhaps at a slower pace, until there is a significant loosening of supply in either market or mortgage lending becomes tighter.

However, lenders are taking a very 'softly softly' approach to arrears and the repossessions court backlog will take a long time to unwind. Moreover, mortgage rates look set to remain extremely low with many lenders offering sub 1% deals.

The annualised mix-adjusted average asking price growth across England and Wales edged down slightly to +7.4% this month; in September 2020, the annualised rate of increase of home prices was 3.8%.

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