There has been a 12% fall in the volume of new homes being listed for sale year-on-year, placing upward pressure on property values, according to the latest Zoopla House Price Index.
The widening supply-demand imbalance is pushing up prices across most parts of the country, with house price growth reaching an almost four year high at 4.3% – the highest rate recorded since April 2017
Wales is the fastest growing country with prices rising at 5.4% year-on-year; at a city level, Liverpool has reached a 15-year high growth rate, with prices up 6.3% on the year.
Regionally, the North West, the North East, and Yorkshire and the Humber are all recording decade high house price growth of up to 5.5%.
House price growth has increased in southern regions of England but affordability pressures limit the scope for above average growth.
The research also found that the congested sales pipeline is seeing sales take almost four months to complete, putting up to 70,000 sales agreed in 2020 at risk of missing the stamp duty deadline.
But while stamp duty holidays often cause some disruption and this one will be no different. Zoopla does not expect the market to grind to a halt on 1 April 2021, once the holiday has ended.
Richard Donnell, research and insight director at Zoopla, commented: “The housing market momentum built up in 2020 H2 has rolled into early 2021, despite a spike in the pandemic and a third lockdown. Sellers are more cautious however and appear to be waiting for case numbers to drop much further before listing their home, or until we see a return to tier based restrictions.
“The strength of the market in 2020 has eroded the available number of homes for sale and this will mean continued upward pressure on house prices in the short term. The most affordable parts of the UK are recording the highest rate of price growth for 10 years up to 5.4% a year. We still expect house price growth to slow towards 1% by the end of the year.
“The rush to beat the stamp duty deadline continues and sellers who agreed to buy a home in 2020 would reasonably expect to make the stamp duty saving. Delays mean we expect up to 70,000 sales agreed in 2020 to miss the deadline meaning the case for a short extension is growing.”