Yahoo Finance 'Seemingly endless demand': where desperate buyers are pushing up house prices
A shortage of properties for sale and booming buyer interest has created a super-hot housing market.
Two out of every three properties on the market in the UK are currently sold subject to contract, according to property website Rightmove.
In the first three months of this year there were 14pc fewer homes on the market compared with the same quarter last year. Yet the number of prospective buyers has increased by 17pc in that period, according to estate agency Hamptons.
It means there are more than nine new applicants registering for every property in the UK, creating the strongest sellers' market in a decade.
In turn, this supply shortage is fuelling a growth in house prices, which surged to record a high in March after the extension of the stamp duty holiday.
Soaring Scotland
The shortage of properties for sale is not spread equally throughout the UK, with stock levels in some regions depleting far quicker than in others.
Stock levels in Scotland are the lowest in the country, having dropped 23pc in the last year. There are now more than 22 applicants registering to buy for every property on the market, up from 14 applicants in the first quarter of 2020, according to Hamptons.
By comparison, London has an average of six applicants registering per property, and it is the only region where the level of available homes has risen, by 17pc over the year.
Andrew Meehan, of Rettie estate agents in Edinburgh, said the city had particularly high demand in the priciest locations, where there are often 10 or 20 bids on each property. He added: "It is hugely competitive and some bids can often be 10pc or 20pc over the valuation price."
Mr Meehan said Scotland's capital historically had a short supply of family homes on the market, with these buyers now driven further out of town by the lack of affordability.
The most competitive local areas
While demand in the capital's market is lagging on a regional level, the borough of Barking and Dagenham is the most competitive local authority in the country. The area, in the outskirts of east London, has seen its stock levels drop by 37pc over the last year, while 56 applicants are registered per property on the market.
Bexley, in south-east London, ranked as the second most competitive local authority with 39 prospective buyers per home available, according to Hamptons.
Many buyers have moved away from the inner zones of the capital, chasing more space and greenery on its outskirts. Proximity to green space in London is reflected in property values, with buyers facing a so-called “park premium”.
Outside of London, the most competitive local markets are in Scotland. The number of buyers per property range from between 26 to 38 in the areas of West Lothian, Fife, Glasgow City, Stirling and South Lanarkshire.
Buyers in Scotland needed to complete by March 31 in order to take advantage of the Scottish equivalent of the stamp duty holiday.
The nil-rate band for Land and Buildings Transaction Tax was temporarily raised from £145,000 to £250,000, meaning buyers could save up to £2,100 if they completed by March 31. In England, the more generous tax break has been extended and then tapered until September.
The battle for Newquay
Newquay in Cornwall currently has the best sellers' market according to Rightmove, where eight out of every ten homes put up for sale this year are sold subject to contract.
Bradley Start, of Start & Co estate agents, said the stock shortage was the worst he had seen in thirty years, with a "seemingly endless demand".
"We’re getting requests for viewings within minutes of a property going on Rightmove and many properties are going to best and final offers due to the competition, something that usually we would only see a few times a year," he said.
But the rural-urban divide which has widened over the last year means the UK's city centres are much more a buyer's market. In the Birmingham and Liverpool city centres 18pc and 22pc of properties respectively are currently sold subject to contract.
