Demand from homebuyers could dry up housing stock, study finds

The UK’s housing supply could struggle to match the post-lockdown demand from home buyers, new figures from Legal & General Mortgage Club have revealed.

Research found that one in four people (25%) say they are definitely planning to buy a home in 2020, with a further 28% saying they are considering a property purchase this year.

However, L&G also found that just 4% of homeowners are definitely looking to sell this year, with a further 12% who are just considering moving. Another 61% of owner-occupiers also said they have absolutely no plans to sell their home in 2020.

The study, based on 2,106 respondents, quizzed 1,097 UK homeowners and 1,009 UK prospective first-time buyers about their home moving plans.

“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 (BTL) purchases,” L&G Mortgage Club director, Kevin Roberts, commented. “Many are turning to independent mortgage advisers to find routes onto the ladder and get their housing plans on the move.

“Given the wide-ranging impact of the COVID-19 pandemic on the economy, the high levels of activity we are seeing in the mortgage market are a sign that the sector remains resilient and has the potential to keep the market buoyant into 2021.”

L&G also suggested the figures highlight a “potential worsening” of the gap between housing supply and buyer demand, with some of the biggest mismatches in supply and demand found in London and the South-East.

In the capital, the research showed that 69% respondents planned to buy property in 2020, with just 12% of current homeowners saying they would consider selling, and 4% definitely planning to sell this year. This compared to 57% of respondents in the South-East still planning to buy in 2020, and just 12% of homeowners who are willing to sell.

The smallest gap between buyers and sellers was found in the South-West, where 52% of people plan to buy, and 23% plan to sell this year.

“Despite the numbers of consumers ready to buy, our research shows that thousands of homeowners are still reluctant to sell in 2020,” Roberts added. “This mismatch between buyers and sellers has the potential to dry up UK housing stock, making it harder for homebuyers to find a new place to call home.

“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.”

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