As the UK property market structure shifts, supply continues to fall far short of demand.
- The fewest number of properties has entered the UK market since November 2007
- With unceasing demand, property prices have soared in England and Wales in the last five years
- A House of Commons report states that the UK property market is going through a long term structural change
The housing supply within the UK has fallen further after a 45% drop in total stock of property, a new post-economic crisis low.
Driven by the lack of supply, the drop is the worst since November 2007. The average annual asking price in England and Wales increased to 7.3%, with the shortage of housing affecting all regions.
The average asking price for a property in England and Wales is now 25.8% higher than it was a mere five years ago and Scottish home prices are rising at an even quicker rate, up 4.7% over the last year. However, north of the border isn’t performing equally across all regions – Aberdeen’s property market has been adversely affected by falling gas and oil prices, with supply outstripping demand. Meanwhile the Edinburgh property market is experiencing a boom, with prices up by 13% in the last year alone and supply severely lacking.
Property prices are rising as fewer properties become available on the market, with fewer owners willing to sell.
Doug Shephard, Director of Home.co.uk, said: “We have witnessed a change in tenure in UK property. Vast numbers of properties have been transferred into the private rented sector as more investors, large and small, have jumped on the buy to let bandwagon. This is perfectly understandable as savings in the bank pay near zero interest and stock exchanges the world over suffer from frightening volatility, but rented property pays a yield.”
The housing market within the UK is looking at a long term structural change. A recent House of Commons report stated that, since the financial crisis, the private rented sector (PRS) has accelerated, with almost one in four households expected to be in the PRS by 2025.