Number of homes for sale collapses by a quarter pushing up house prices
The number of homes for sale has collapsed by a quarter this year, with the shortage unlikely to improve in the near future.
There was a 25pc fall in homes for sale in the first six months of this year, compared to the same period in 2020, according to property website Zoopla. This was compounded by surging demand from homebuyers keen to benefit from the full stamp duty holiday, pushing up house prices.
Last month, trade body the Royal Institution of Chartered Surveyors recorded its third consecutive fall in the number of new properties coming to the market. It said this shortfall had recently become "more prominent".
Potential sellers have been reluctant to put their properties on the market in case they are unable to secure another home to move into, creating a vicious cycle.
Meanwhile, demand is around 80pc higher than the average for this time of year between 2017 and 2019. However, it has fallen by 9pc in the two weeks after the stamp duty break was tapered on July 1.
The average house price hit £230,700 in June, according to Zoopla, up 5.4pc annually. The figure is the highest recorded by the company and more than 30pc higher than previous market peak of £177,300 in December 2007.
Grainne Gilmore, of Zoopla, attributed the shortage of homes for sale to two factors. She said: "Firstly, a rise in activity amongst first-time buyers resulted in an influx of buyers in the market with no property to sell.
"Secondly, the sheer volume of activity in the market, as buyers make lifestyle changes and search for more space, has eroded the total number of homes, especially family houses, for sale."
She predicted "above average" activity in the housing market would continue in coming months. Zoopla has predicted by the end of the year annual price growth will be 4pc to 5pc.
Ms Gilmore added: "To a certain extent this trend will have been augmented by the stamp duty holiday, with bigger savings on offer for larger properties – typically houses.
"But underneath this, there is a continued drumbeat of demand for more space among buyers, both inside and outside, funnelling demand towards houses, resulting in stronger price growth for these properties."
Demand for houses of all types has more than doubled when compared to "normal" market conditions, according to Zoopla.
Family homes were the most sought after, with demand from buyers up 114pc on levels seen at the same time of year between 2017 and 2019.
