RICS (The Royal Institution of Chartered Surveyors) is warning of an acute shortage of supply, as Britain’s ageing population of home owners move less frequently and focus instead on helping their children onto the housing ladder. They suggest that house prices in the UK could rise by 25 % over the next five years, given that the number of homes available for sale has fallen to its lowest level since records began in 1978.
The reality is that nationally the demand for homes still rising, thanks in part to Government policies such as the Help to Buy scheme. It’s now certain that prices will resume an upward trajectory, having slowed down just a little before the recent election.
These findings have intensified the debate about whether or not sufficient numbers of homes are being built to serve Britain’s growing population. It is said that people are now ageing in better health and staying in their homes for longer, leading to fewer family homes going on the market and that the situation is being exacerbated by a lack of suitable retirement properties.
Parents, whether middle aged or retired, are now said to be acutely aware of the difficulties their children face in buying their first home – and are diverting funds and attention to this aim, rather than seeking to move. The low cost of mortgages has also contributed to a shortage in supply as people take advantage of the cheapest-ever interest rates to lock into long-term deals rather than move. Mortgage brokers also say that people in larger family homes are also put off moving by the tougher loan criteria introduced by the lenders just over one year ago.
At the top end of the market some owners have been put off selling by reforms and changes to the SDLT (Stamp Duty Tax) regime in December. The increased cost of buying a property worth more than £1.5 million (its +12 % in Stamp Duty) has meant fewer large properties coming to the market, and as a consequence, leading to fewer smaller properties on the market. The costs of moving house nowadays are also so high that many homeowners prefer to stay put and improve what they have got, rather than embrace the stress and costs of moving.
If you sell, where are you going to buy?
With less stock on the market, there is less choice and some chains are breaking down as a result. It becomes even more of a challenge to buy at the right price. This also makes for a difficult situation for FTBs (first time buyers ) as they are fishing in a smaller pool of properties and are competing with those buying properties as an investment.
We should also take into account that a lack of suitable properties (retirement suitable) to move to may stop people from putting their own home onto the market – especially those downsizers who are concerned about sizable moving and stamp duty costs.
The above national picture is of course reflected here in Harrogate – but with certain differences. Our town and marketplace really is unique. Although we certainly do have a large constituency of semi and fully retired homeowners, this is more than counterbalanced by much younger homeowners who are ‘in the market’, buying and selling homes to take account of growing families and new schools.
Homeowners in Harrogate are very happy to put their homes on the market because they are aware that there is a constant flow of new properties in every price range feeding into the local busy and dynamic marketplace on a daily basis.
In one key respect Harrogate certainly does exactly reflect the national trends – prices are moving up!
Come along and see the Myring’s team , talk to us and enjoy a free no obligation chat about the local marketplace and the Sales & Lettings services we provide. We are here to help – and will be pleased to be of service.
