2020 and 2021 have so far been two years like no other, with challenges and changes on a UK and global level. However, the latest government and industry statistics show a housing demand increase in the UK, showing the population’s resilience and change in lifestyle values.
So, what do the statistics for housing market supply and demand show?
- Housing demand in 2021 is up 6% – According to Estate Agency Get Agent, their latest index shows that demand has risen in the first quarter of 2021 by 5.7%. The highest demand is seen in Bournemouth, Newcastle, Oxford, Bristol, Glasgow, Sheffield, Leeds, and Plymouth, with London showing its first signs of higher housing demand, following the rises seen elsewhere.
- Housing demand in 2020 was up 40% – According to Zoopla, demand in 2020 was 40% higher than in 2019.
- November 2020 house sales were up 20% over 2019 – HMRC recorded 115,190 house sales in November 2020, which is up 19.3% from November 2019.
House prices and mortgage approvals are also on the rise:
- House prices rose 7.5% in 2020 – According to the Office of National Statistics (ONS), house prices have increased by 7.5% over the year up to January 2021, with the highest price growth seen in rural areas.
- Mortgage approvals are at their highest since 2007 – According to figures from the Bank of England, the highest number of mortgage approvals were recorded in November 2020. Mortgage approvals are at their highest since August 2007.
What Has Led To The Increase In Demand
The increase in housing demand is broadly believed to be in response to two significant events that occurred in 2020:
- COVID-19 pushes lifestyle priorities towards more space – The Coronavirus pandemic has changed the way that people work, with a large shift to remote working from home, increasing demand for larger properties with a higher number of rooms to accommodate home offices. Furthermore, with restrictions on socialising indoors and in groups, more outside space is a top priority for many home buyers. The combination of these desires for more space is reflected in a change where demand is strongest, with rural properties and houses in higher demand than city apartments and flats.
- The Stamp Duty holiday significantly lowers the cost of buying a home – In England, the Stamp Duty holiday was introduced in July 2020 (July 15th in Scotland and July 27th in Wales). This tax break was set to end on March 31st, 2021. However, the Chancellor of the Exchequer has announced that the Stamp Duty holiday will be extended to June 30th, keeping the higher threshold before Stamp Duty is applied.
Can Supply Meet Demand?
Housing supply and demand are often in an imbalance, with demand higher than supply. However, access to residential development finance helps developers acquire the financing they need to build or convert one home to hundreds.