Supply of homes might dry up after “unprecedented” buyer demand

The supply of homes coming to the market could struggle to meet the demand from buyers shown in recent weeks, with prices soaring as a result. 

New figures from Legal & General Mortgage Club show 25 per cent of people definitely planning to buy a home in the near future and a further 28 per cent saying they are considering a property purchase.

However, just four per cent of homeowners are definitely looking to sell this year with a further 12 per cent considering it. 

More than six in 10 owner-occupiers say they have absolutely no plans to sell their home in 2020.

Some of the biggest mismatches in supply and demand were seen in London and the South East. 

In the capital, 69 per cent of respondents planned to buy property in 2020, but just 12 per cent of current homeowners said they would consider selling and a mere four per cent definitely planned to sell this year. 

Elsewhere in the UK, the potential for a mismatch between supply and demand continued. 

In Wales 50 per cent of respondents were planning to buy in 2020, but just 11 per cent of homeowners said they were planning to sell. In Scotland it’s 49 per cent against 17 per cent. 

The smallest gap between buyers and sellers was found in the South West, where 52 per cent of people planned to buy and 23 per cent planned to sell.

“From first-time buyers to landlords, we are seeing unprecedented demand from consumers post-lockdown eager to move ahead with home moves and buy to let purchases” says Kevin Roberts, director of the club.

“Given the wide-ranging impact of the COVID-19 pandemic on the economy, the high levels of activity we are seeing in the mortgage market are a sign that the sector remains resilient and has the potential to keep the market buoyant into 2021. Yet, despite the numbers of consumers ready to buy, our research shows that thousands of homeowners are still reluctant to sell. This mismatch between buyers and sellers has the potential to dry up UK housing stock, making it harder for homebuyers to find a new place to call home” he continues.

“Supply and demand continues to be a challenge facing the housing market and while the government has already announced its plans to ‘build, build, build’, delivering on its commitments to build thousands more new homes will clearly need to be a priority to meet the demand from hopeful homeowners and landlords.”