First-time Buyers

UK housing market in ‘supply crisis’

Adam Williams
Written By:
Adam Williams

Dramatic action must be taken to rectify a ‘supply crisis’ in the UK housing market, a market analyst has warned.

Data from property portal Rightmove found that the average asking price for a UK property increased to £294,542 this month.

However, increasing demand and falling supply is starting to cause more serious problems in the housing market.

The number of enquiries made to estate agents was almost a quarter (22%) higher than a year ago. During the same period the number of new sellers fell 10.6%.

Miles Shipside, Rightmove director and housing market analyst, said the country faced a housing crisis and that government, planners and developers needed to take action urgently.

“Another month, and another record high in the price of property coming to market. While the monthly increase is very modest, the same period a year ago saw a monthly fall of 0.6% which is more the norm given the onset of the summer holiday season,” he said.

“However, given the widely acknowledged supply crisis and a sharp drop in new seller numbers this month compared to this time last year, it is somewhat surprising that the rate of increase has slowed to such an extent.”

Changes announced in the Budget last week will make it easier for people in London to extend their homes and encourage development on brownfield sites, he said.

Shipside added: “The greatest mismatch between demand and supply is at the lower end of the property ladder, as no doubt many buyers in this category would like to afford to buy a larger home, but have had to accept that it is out of their reach and downsize their aspirations to increase their chances of a successful purchase. The forthcoming extra tax burdens on buy-to-let investors may help to tip the balance in favour of first-time buyers, but the consequent drop in rental property supply could push up rents.”