Take your pick – housing demand and rental stock at record high

As we near the end of 2020, NAEA Propertymark and ARLA Propertymark provide analysis of their 2020 sales and lettings data.

The housing market bites back

The number of prospective buyers reached a record high with an average of 403 house buyers registered per branch, compared to 320 on average throughout 2019.

Looking back over the last decade, demand for housing is up by 55%, from 260 per branch in 2010.

The number of properties available to buy hasn’t changed year-on-year, though, with an average of 39 available per branch consistently since 2018.

July saw the highest number of properties available this year, with an average of 43 available to buy per branch. This is a considerable drop from a decade ago, when there were 63 on average per branch.

Meanwhile, the number of sales agreed per branch throughout the year hit a decade high of 10 sales on average per month. Historically, this figure has stayed consistent, only moving between seven and nine between 2010 and 2019.

The average proportion of total sales made to first-time buyers (FTBs) decreased by two percentage points in 2020, from 27% in 2019 to 25%. This figure is consistent with both 2018’s average figure of 25% and the past decade’s average of 25% of total sales being made to FTBs.

The PRS goes from strength to strength

In the private rented sector, the supply of rental accommodation was also the highest on record this year, with 203 properties managed on average per branch compared to 2019’s figure of 199.

As landlords continued to feel the pinch, the number of buy-to-let (BTL) investors selling their properties remained high, at an average of four per month in 2020. The figure spiked to five per branch in February and September.

The number of tenants experiencing rent hikes has fallen this year to 36%, from an average of 44% in 2019. This is due to Covid-19 rent struggles preventing further tenant fees ban-related rent increases.

What’s more, agents reported the highest number of prospective tenants searching for homes on record in August, when 101 were recorded per branch, compared to 86 on average across the year.

This yearly average is the highest on record, topping 2019’s previous figure of 69 prospective tenants searching for homes.

“Both the sales and rental markets have remained remarkably resilient throughout this trying year, despite market closure between March and May,” Mark Hayward, chief policy advisor at Propertymark, comments.

“The prioritisation by the government of a functioning property market and subsequent implementation of the stamp duty holiday as well as measures taken to keep the rent flowing within the private rental sector, have allowed for record breaking levels of house sales and rental accommodation.”

Hayward predicts this boom will continue through the new year but is ‘increasingly concerned’ about the impact of the stamp duty cut – which he calls the ‘cliff edge’ – ending on March 31 2021.

He concludes: “This cliff edge has already increased pressure on service providers within the industry, causing delays for buyers and sellers, and could cause thousands of sales to fall through at the final hurdle as buyers realise their sale will not be completed ahead of the deadline.”