The UK housing market has been experiencing a surge in demand, with the number of buyers outstripping the supply of available properties. This has led to a significant increase in house prices, with the average price of a UK home now standing at over £350,000.
The reasons behind this surge in demand are varied. Firstly, the COVID-19 pandemic has led to a shift in priorities for many people, with a greater emphasis being placed on the importance of having a comfortable and spacious home. This has led to an increase in demand for larger properties with gardens and outdoor space.
Secondly, the stamp duty holiday introduced by the UK government has also played a significant role in driving up demand. The holiday, which was introduced in July 2020 and is due to end in June 2021, has meant that buyers can save up to £15,000 on the purchase of a property. This has incentivised many people to enter the market, leading to increased competition for available properties.
Finally, the low interest rates offered by mortgage lenders have also contributed to the surge in demand. With interest rates at historic lows, many people are taking advantage of the opportunity to secure a mortgage with favourable terms.
However, the increase in demand has not been matched by an increase in supply. The COVID-19 pandemic has led to a slowdown in the construction of new homes, while many existing homeowners have been reluctant to put their properties on the market due to the uncertainty caused by the pandemic.
This has led to a situation where there are simply not enough properties available to meet the demand from buyers. As a result, house prices have been pushed up, making it increasingly difficult for first-time buyers to get onto the property ladder.
The UK government has recognised the need to address this issue, and has announced a number of measures aimed at increasing the supply of affordable housing. These include a £12 billion investment in affordable housing over the next five years, as well as a new planning system designed to streamline the process of building new homes.
However, it remains to be seen whether these measures will be enough to address the current imbalance between supply and demand in the UK housing market. In the meantime, buyers will need to be prepared to pay a premium for the limited number of properties available, while first-time buyers may need to consider alternative options such as shared ownership or Help to Buy schemes in order to get onto the property ladder.
