The data from Zoopla's monthly House Price Index suggests that we are now running six weeks ahead of a typical year, recording £149bn worth of property sales during the first 15 weeks of 2021.
The heightened activity in the market continues to impact supply, with the total number of homes available to buy and not yet under offer down almost 30% in the first half of April.
According to the portal, Glasgow, Bristol, Nottingham, Stoke, and Middlesbrough are currently the top five busiest sales markets in the UK.
However, Zoopla also reported a drop in annual price growth to 4% in the last month, down from a post-pandemic peak of 4.5% in January and suggests that sharp market growth is set to moderate over the coming months, following a peak in demand during the week after Easter.
Despite a softening in pace of growth, residential property prices remain almost double the growth recorded in March 2020, compounded again by lack of stock.
High demand has also seen the volume of new homes for sale drop sharply. During the first half of April, the number of homes available to buy was 30% lower than the level of stock recorded during the same comparatively ‘normal’ period in the markets of 2017-19.
Three- and four-bedroom houses have seen the biggest annual drop in supply – fuelled by buyer demand for greater space and the ongoing trend to upsize.
However, Zoopla predicts that the tide could be about to turn with regards to supply. Evidence suggests that listings started to rise in line with when schools reopened six weeks ago; for many families, bringing a property to market was easier once home-schooling came to an end.
The latest figures show that all regions across the UK have witnessed at least a 20% fall in the availability of family homes for sale and there is a tangible risk that the lack of family houses for sale will limit the growth of sales volumes in the second half of 2021, ultimately stifling current market impetus.
Grainne Gilmore, head of research at Zoopla, commented: “The imbalance between supply and demand, which is creating a very tight market for family homes, will start to ease in the near term as homeowners become increasingly comfortable opening their homes to viewings, in turn, building supply of new stock.
“The scale of buyer demand will also moderate from the peaks seen after Easter as lockdowns end across the country and there is some return to pre-pandemic ‘normality’.
She adds: “However, the fundamental imbalance will remain. Demand will remain strong as the ‘search for space’ among homeowners has further to run, especially as some office-based businesses are now confirming how their working practices will change in the longer term. With appetite strong, homeowners thinking of selling should check My Home for a house price estimate and see if it’s time to sell.
Grainne concludes: “More flexible working arrangements open up new opportunities for homeowners to move to a further-flung location. At the same time, the roll-out of the 95% mortgage guarantee will mean more demand from first-time buyers, fuelling demand without replenishing supply.”
John Eastgate, Managing Director of Property Finance at Shawbrook Bank, comments: “It’s important to look to the underlying and long-term trends which point to a resilient property market, even after stripping out the stamp duty stimulus. Property still offers a long term capital growth opportunity, despite the continuing strong run for house prices.
“The ability to work from anywhere has allowed people to extend their search to areas that before would have been previously discounted and we see regional price movements reflecting this. That said, city centres will undoubtedly bounce back and could arguably represent good value in the short term.”
