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Supply of homes rises, but is still outpaced by demand

Christina Hoghton
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Christina Hoghton

Despite the increase in supply, prices are still rising, making it difficult for aspiring first-time buyers to get on the property ladder

New home listings were 5% higher in January than the previous five-year average, as the flow of supply starts to increase, said Zoopla.

The increase in homes coming on to the market was seen across all property types, including in demand three and four-bedroom detached family homes, according to the property portal’s latest House Price Index.

However, Zoopla found that the mismatch between supply and demand continued, despite the rise in homes for sale, as demand is still rising too.

As a result, house prices rose by 7.8% in the year to the end of January.

The average UK home now costs £244,100, after increasing by around £80,000 during the past decade.

Regional splits

Wales saw the highest increases for the 11th consecutive month, with property values rising by 11.7% in the past year, followed by the South West at 9.7% and the North West and East Midlands, both at 9.2%.

London continued to lag behind other regions, with the average cost of a property rising by just 3.1% during the same period.

Paul Coss, co-founder of Haysto said of the figures: “Potential homebuyers continue to have obstacles thrown at them as yet house prices continue to rise. Making the step onto the property ladder was already a difficult enough process, but now raising the additional funds, while the cost of living soars, is making the process seemingly harder than ever. Many already think that homeownership is nothing more than a pipedream.

“Faith in the possibility of owning your own home, especially for those that may be in adverse credit situations, seems to be at an all time low. And it can often feel as though no one is on your side. But, it’s important to know that there is someone in their corner ready to help. People’s financial circumstances are very rarely straight-forward and more often than not people have more complex financial situations. Not fitting the mould shouldn’t crush the dream of homeownership.”

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, added: “The housing market was a flurry of activity in January and February, with a surge of sellers hammering in a new For Sale sign and desperate buyers snapping them up sharpish. It was the busiest start to the year in six years, but it’s unlikely to last.

“The New Year saw a surge of sellers keen to make a new start. There’s a good chance that some of this was driven by the rate rise in December, and the worry that if they didn’t hurry up and make a move, they’d end up paying much more for a mortgage on their new home a few months down the line. Buyers, meanwhile, have been desperately waiting for new stock, so were poised to snap them up. Half of the homes on which sales were agreed were snapped up within three weeks.”