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High demand from buyers leaves 225,000 shortfall in homes for sale

Buyer demand in the first half of 2021 exceeded supply which has resulted in 225,000 fewer homes on the market and higher prices.

Surging demand from buyers during the first half of 2021 has seen 140,000 more sales agreed compared to the long-term average according to Rightmove, with 85,000 fewer new listings.

This imbalance in supply and demand means there is a 225,000 shortfall in the number of homes for sale resulting in higher asking prices rising 6.7% or £21,389 in the last six months.

Price growth has continued for first time buyers with the average asking prices at an all-time high of £338,447 up 0.7% or £2,374 for the month.

See how much you can borrow from a lender to get on the property ladder for your first home at this link:
First time buyer calculator with instant mortgage figures to buy your new home.

Strongest demand for houses

The trend since the lockdown is home movers needing more indoor and outdoor space and demand for four-bedroom properties surged with a 39% rise in sales and 6.7% higher prices in the last six months.

Similarly three bedroom houses are higher with sales rising 28% and suffering a reduction in supply of 10% compared to 2019 with prices higher by 6.9% in 2021.

This table from Rightmove shows average UK asking prices (excluding London) for January and July 2021 for each sector and six month change.
Sector July January
First time buyers £207,386 £200,578 +3.3%
Second steppers £308,668 £288,752 +6.8%
Top of the ladder £621,120 £562,543 +10.4%
Those second steppers trading up have seen average house prices rise from £288,752 in January 2021 to £308,668 in July, a rise of 6.8% or £19,916.

In contrast, first time buyers are less affected as they purchase homes with two beds or less and sales are higher by 28% and a smaller rise in prices of 3.4% over six months.

If you are a remortgage buyers with gains in equity, you can consider taking a further mortgage advance rather than moving and use this to create more space such as an extension or home improvements.

Rightmove expects the number of sales reported by HMRC in the first six months of the year will be 800,000 which would beat the record of 795,000 set in 2007.

Demand has been increased with the creation of new households and the stamp duty holiday deadline and supply limited by a reluctance to sell as property offers a better return than other asset classes.

Prices rise for expensive properties

The largest imbalance is for the top-of-the-ladder sector with the most expensive properties where the majority of homes are detached with four bedrooms or more.

Number of sales agreed have surged 39% but at the same time there are 15% fewer properties on the market compared to 2019.

In the last six months asking prices for top-of-the-ladder have increased 10.4% or £58,577 from £562,543 in January to £621,120 in July.

These higher house prices allow the equity release buyers the opportunity of releasing cash from your home to improve your quality of life, home improvements or even buy a more expensive home.

The London region has not increased by these amounts with asking prices up only 0.5% year-on-year and currently averaging £645,268.

Some boroughs are performing well with Kingston upon Thames higher by 9.7%, Barking and Dagenham up 7.3% and Bromley increasing 7.0% over the year.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home to a larger property and want the best mortgage deal. Learn more by using the property value tracker chart and equity release calculator.

Start your free home moving quote and we can find the most competitive mortgages at the lowest rates for your new property at this link:
Free mortgage quote with the low mortgage rates for your new home.

If you release equity from your home to buy a dream home or gift to a family member, we can recommend lifetime mortgages so begin your equity release quote for the latest provider offers.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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