According to the latest figures from Rightmove, there are more buyers out there than ever before – their traffic keeps on hitting new highs. Yet, even after the election result, which stopped a lot of the uncertainty that had muted the market, sellers have remained thin on the ground. The number of properties coming onto the market has fallen by almost 10% vs a year ago.
That’s why the estimates for house price growth, over the next few months, continue to rise as demand outstrips supply in many areas of the country.
It’s not quite the same in every region – London and the South continue to power ahead in the house price stakes whilst things are more sluggish in the North, but this is all to do with demand and supply.
Mortgage rates are an all-time low, with competition for the market that is out there, reaching fever pitch.
But why are sellers so reticent to put their properties on the market?
Part of the issue is that people work out the moving costs and in most cases receive a massive shock.
Moving costs, according to analysis by ONS (The Office of National statistics) have increased at double the rate of the cost of living over the last 10 years.
Estate agency fees are a major factor.
With the average London property price now at over £600,000, the traditional estate agents commission (of 1.8% plus VAT) results in a charge of £12,960.
Stamp duty may have gone down for properties in this price bracket last autumn but would still cost £20,000.
So just to move in the traditional way, means costs of almost £33,000 plus all the solicitors costs, removal vans etc, unless you look for alternatives.
It’s why we have been so successful so far – there are many people who not only want an alternative, they need an alternative just to be able to move.
We can’t though resolve all of the supply issue. That requires people in government to step up and accept that housing is a major issue – think about what you need to earn to buy a £600,000 property (a £200,000 deposit and a salary of £100,000 should do it).
The government needs to make building houses easier – getting rid of lots of the red tape and the cosy policy of stopping building so as not to annoy anyone rather than accepting that the UK needs lots and lots of new housing to meet demand and stop house prices spiralling out of reach of normal people.
I posed the question to my 8 year-old daughter as we passed a homeless person, “What should we do if there aren’t enough houses for people to live in?”
She answered ‘We should build some more, Dad”
“But there’s not very much space,” I said.
“That’s not true, there’s loads of space”
And she’s right. There is loads of space to build new houses.
Yet we, in our adult wisdom, have decided that we shouldn’t use that space.
My daughter vs the Planning and Housing Minister – that’s a debate I would love to see……..