Where are all the houses?

[Cybercynic]

Hi All

With the prices zooming to all time high the supply of new houses coming to the market keeps declining overall. I know few people who have chosen to postpone putting their properties on the market for sale since they could not find anything to buy. And this ends up becoming a self-fulfilling prophecy with few people coming on to the market as they do not find anything suitable.

My question is what will break this cycle of low supply back to normal levels. With prospective sellers hoping to maximise their house price in the current market however, un-able to find something suitable to buy before they come to the market, how will this logjam ever be resolved. I am confused.

Any ideas?

I know Homes England are desparately trying to buy up pieces of land that can be developed upon and build homes. They build affordable homes and social housing They also try to get permissions to build on brown land for housing too.

@caringcarer

I know Homes England are desparately trying to buy up pieces of land that can be developed upon and build homes. They build affordable homes and social housing They also try to get permissions to build on brown land for housing too.

@caringcarer while the new supply emanating from new builds will take time to materialize, my question was about the exisitng homeowners who have chosen not to put their houses on the market because they cannot find anything to buy, thereby creating a cycle for low supply. What will break this cycle?

The housing market has been red hot lately with the holiday on stamp duty. Until September it is half price so should still be moving until then after which I am expecting a stagnant period as most wanting to move would have done so whilst stamp holiday in place.

I hear you, OP. I was one of those sellers who took theirs off the market because they couldn't find anywhere.

Maybe once the SDLT holiday is over things will pick up, but by then we'll be getting closer to Xmas and who knows what will happen with covid this winter. So maybe the market's going to stay like this until at least early next year.

Until September it is half price

It really depends on your purchase price, for some people it may still be half price, but for many the major gains from the stamp duty holiday are over.

Until the end of June the maximum saving from the stamp duty holiday was £15,000. At the moment and until the end of Septemeber the max saving is £2,500.

@Mildura

Until September it is half price

It really depends on your purchase price, for some people it may still be half price, but for many the major gains from the stamp duty holiday are over.

Until the end of June the maximum saving from the stamp duty holiday was £15,000. At the moment and until the end of Septemeber the max saving is £2,500.

Oh, that's a significant difference. I guess it shouldn't be making much difference to the market now then.

There was a massive rush round here in the doting with people chasing the stamp duty holiday. In the last week of June every other vehicle on the road was a removal truck! A new batch of “for sale” signs seems to have popped up recently.

Not really sure what you mean by 'normal levels'. This might be the new normal, at least for the next few years. The issue is that there are too many buyers and not enough houses. I think that this is due to a few things.

1. Years of pent up demand. Many people have delayed buying, firstly due to Brexit uncertainty, and then due to Covid. There comes a point when people simply can't continue waiting.

1. Lockdown savings enabling more people to save deposits

1. Inflation. People are keen to pile money into assets

The issue will resolve when demand decreases. Probably if and when interest rates go up.

Most agents won't allow buyers to view unless they have buyers lined up for their own properties. And one of the most notable things about the current market is that decent homes sell incredibly quickly, often before they reach the open market at all.

With that in mind, people who aren't putting their houses on the market because they can't find the right property to buy would appear to have things a bit backwards. Waiting until you see something you like before putting you own property on the market will basically guarantee that you won't get the property you want!

@MidnightMeltdown

Not really sure what you mean by 'normal levels'. This might be the new normal, at least for the next few years. The issue is that there are too many buyers and not enough houses. I think that this is due to a few things.

1. Years of pent up demand. Many people have delayed buying, firstly due to Brexit uncertainty, and then due to Covid. There comes a point when people simply can't continue waiting.

1. Lockdown savings enabling more people to save deposits

1. Inflation. People are keen to pile money into assets

The issue will resolve when demand decreases. Probably if and when interest rates go up.

Thanks for this concise explanation as to why there are considerably more buyers than houses available. My OH and I have been puzzling over this for weeks, especially because in the area we are looking to buy there seem to be 10+ people actively offering on the houses we are interested in. We just kept thinking that surely they can't all be FTB and most will have houses on the market themselves?! We actually sold (STC) our house really quickly, but then struggled to secure an onward purchase and so we have reluctantly withdrawn from the sale (we would have held on, but our buyers would not or could not wait). We plan on waiting until September and trying again, but I'm not sure if we'll have any more luck finding something to buy then. Fortunately, we are in no rush.

As @CasperGutman has said, in this market you have to have sold STC before you'll even be allowed a viewing, so it's important to complete this step first.

@Mildura, sorry I did not realise that big difference. Don't know where I got idea it was 50 percent. Where I live in West Midlands there were loads of houses up for sale around Xmas and up to early March to then I noticed fewer houses from May onwards. Still quite a few up for sale but not many new ones appearing.

Great reasons above, and another is the uncertainty of employers and WFH rules. As things open up more, we'll see the dynamics of which employers are going to be demanding everyone in the office full time (likely to be the minority) and those who will long term work to hybrid models and see those settle out. So the outside space and spare room for an office houses will see continued high demand as more people take the plunge and the labour market stabilises.

We were allowed to view the house we are buying before selling ours as we were on with the same agent, we even got our offer accepted that day (sellers moving to parents), we then sold 2 days later but our buyers weren't even on the market, they marketed and sold, all good this was about 4 weeks in total. Then their buyer pulled out (issues with damp), we then immediately remarketed and sold in a few days to another buyer who wasn't on the market, they marketed straight away and sold within 1 week (chain now complete). So yes time has passed and we have all had to be very patient but no one has missed out viewing because we weren't under offer. This took the pressure off.

I think having to be under offer before you view is causing people to hold off as the pressure at that point is too much.

Yes it’s simply not true that people aren’t allowed to view until they have buyers lined up. Have first hand knowledge of so many cases atm where people have successfully offered then listed their own.

@Wantingtogetitright

Yes it’s simply not true that people aren’t allowed to view until they have buyers lined up. Have first hand knowledge of so many cases atm where people have successfully offered then listed their own.

I think this is very area dependent. In my area you can view, but your offer won't be considered unless you are cash or have an offer on your property and this has been the case for over 20 years. Though I am friendly with a couple of agents who say due to the Covid restrictions they are thinking about filtering the time wasters.

We had an agent round last month to value our home. He said it would be marketed for £100k more than we paid (350) in 2018.

He said he would only permit 15 viewings, and they would all have to be in a position to proceed with DIP/AIP, offer accepted on current property and satisfy the ea financial team.
Said to expect offers between 10k and 25k over asking and already has buyers lined up, so no real need to advertise.

House 4 doors away sold 2 months ago, 12 over asking price offers and was only on rightmove for 6 days.
The market is insane.

@Wantingtogetitright

Yes it’s simply not true that people aren’t allowed to view until they have buyers lined up. Have first hand knowledge of so many cases atm where people have successfully offered then listed their own.

Its down to the ea, I also would insist in viewings only from people who are in a position to proceed, whittle out the time wasters.

@Wantingtogetitright

Yes it’s simply not true that people aren’t allowed to view until they have buyers lined up. Have first hand knowledge of so many cases atm where people have successfully offered then listed their own.

Some EAs might not vet potential buyers before viewings, but I'm sure few if any would advise their clients to take offers seriously from people who still have to sell their own properties.

Yes, the seller obviously has the final say on it of course but we’ve personally not been stopped from viewing any houses even though ours isn’t sold and that’s been with several different EAs. I’ve seen multiple people on MN (other threads) state almost as fact that you can’t view houses until you’re under offer and it’s untrue as a blanket rule.

I think just now they know that the vast majority of houses are flying off the shelves so it’s not an issue. You’re going to struggle more to find a property to purchase than a buyer to purchase your property right now. If the seller hasn’t found a house to purchase yet then someone who hasn’t sold yet might actually be preferable as less pressure.

That’s not to say that if it came down to two buyers and one was sold and one wasn’t and there wasn’t much difference in the offers they wouldn’t go for the buyers who were sold!

So shortsighted of people not allowing viewings unless viewers are sstc themselves, if the market is so hot as everyone says then the prospective purchasers house will be sstc anyway as soon as they put it up for sale.

It's a catch 22. The assumption is that if buyers' houses will sell quickly. But not necessarily the reality.

I think the overall value of houses affects how quickly it'll sell. I think anything over 500K outside of London will take a bit longer but again is hard to tell.