According to the latest House Price Index, property listings were 5% higher in January than in the previous five years as the supply of homes finally begins to increase.
The shortage of homes available to purchase eased off at the start of this year with new listings 5% higher than the five-year average, indicating that we are seeing the start of recovery in supply. The availability of homes to buy increased in all types of properties including the in-demand three- and four-bedroom family homes. However, the price rise for houses has continued to significantly outstrip that of flats, with the average cost of a semi-detached home rising by 9.1% in the year to the end of January, compared with a rise of just 2.6% for flats.
Despite this rise in available homes for sale, it still didn’t meet the demand which has continued to put upward pressure on house prices. However, the rate of increase is slowing down.
At present, the average price in a UK home is now £244,100. This is an increase of approximately £80,000 over the last ten years. House prices increased by 7.8% in the year to the end of January but with signs that this rate is slowing down. Property values have risen by 0.9% in the last three months – this is the slowest rate of growth since August 2020.
There is still a mismatch between housing supply and demand. The number of people looking to buy a new home in late February was 70% above the five-year average, while the total number of homes for sale was 43% below it.
There has been record demand for properties since the lifting of lockdown restrictions in 2020, with January 2022 being the busiest month for the property market since 2016. Flats currently represent better value as they have seen a slower house price growth over the last year compared to houses, and they are in less demand.
The number of three- and four-bedroom homes for sale is now 10% higher than it was a year ago but there’s still a shortfall in the supply of terraced, semi-detached, and detached homes.
At present, the housing market is starting to get back to more normal conditions and reverting to pre-pandemic levels for this time of year in Scotland.
We are in a very fast-moving market, with half of all sold homes taking under three weeks to secure a buyer compared to a third of properties taking this long to sell in the same period in 2021. Three-bedroom homes typically take only 23 days to sell.
The increase in supply of homes is likely to continue for the rest of this year as the improved choice will result in more properties being listed for sale.
If you are considering selling your home, contact us at Caledonia Bureau.