Unprecedented property demand not being matched by supply - claim

Housing supply in the UK is struggling to meet unprecedented levels of demand from property purchasers post-lockdown, according to Legal & General Mortgage Club.

The firm's survey, which spoke to over 1,000 prospective buyers and more than 1,000 UK homeowners, suggests that a quarter of people are definitely planning on buying a property this year, with a further 28% considering a purchase before the end of 2020.

Conversely, just 4% of homeowners are definitely looking to sell, with 12% considering a move this year. Some 61% of owner-occupiers say they have absolutely no plans to sell their property this year.

Legal & General Mortgage Club says the findings highlight a worsening of the gap between supply and demand, which could leave buyers bidding for fewer properties and struggling to make their desired purchases.

Some of the supply/demand mismatches are more significant on a regional basis. In London, 69% of survey respondents are planning to buy a property this year, while just 12% of homeowners are considering selling and 4% are definitely planning on doing so.

In the South East, 57% of respondents are planning to buy in 2020, while just 12% of owners are willing to sell before the end of the year.

Meanwhile, 50% of respondents in Wales are planning to buy, matched by just 11% of owners looking to sell. In Scotland, the gap is smaller with 49% looking to buy and 17% of owners keen to sell.

The smallest supply/demand gap is in the South West, where 52% of participants are looking to buy, against 23% of owners who are planning to sell before the year is out.

Legal & General Mortgage Club says that the supply/demand imbalance highlights the need for the government to focus on housebuilding and working towards its target of delivering 300,000 new homes a year by the mid-2020s.

"From first-time buyers to landlords, we are seeing unprecedented demand from consumers post-lockdown eager to move ahead with home moves and buy-to-let purchases," says Kevin Roberts, director of Legal & General Mortgage Club.

"Many are turning to independent mortgage advisers to find routes onto the ladder and get their housing plans on the move."

He says that given the wide-ranging impact of the Covid-19 pandemic, the levels of activity in the mortgage market are a sign that the property market remains resilient and can remain buoyant into 2021.

"Supply and demand continues to be a challenge facing the housing market and while the Government has already announced its plans to ‘build, build, build’, delivering on its commitments to build thousands more new homes will clearly need to be a priority to meet the demand from hopeful homeowners and landlords," adds Roberts.