The supply-demand imbalance continues to place upward pressure on property values across many parts of the country, which largely explains why Worcestershire estate agency Nicol & Co is predicting that prices will rise 6% by the end of this year.
Matt Nicol, managing director of Nicol & Co, has rubbished claims by some property commentators the housing market is about to crash.
He explained the reasons for his bright outlook as “the loo roll effect” in one of his latest market insight vlogs.
Nicol said: “We predict that house prices will end up 6% higher by the end of this year, and there’s a lot of good reasons for that.
“If you forget about the 2007-2008 price crash, house prices typically rise between 3-5% each year.
“So with our prediction that house prices are going to go up by 6%, and with others predicting as high as 7%, we’re still in a very, very strong market.
“We’re expecting things to continue in this way because basically there’s still a supply and demand issue: there’s a great demand for properties, but a shortage of properties on the market right now.
“You will remember the loo roll prices that came about when everyone was out panic buying? Prices of loo roll went up because there was a high demand for it and a lack of supply.
“It’s similar-ish with houses right now: there’s a lack of supply, lots of people looking to purchase and as a result that’s pushing the prices up still.
“It’s not going to be as bonkers as it was, but actually you’ll still find that house prices are on the up.
“We can’t build these homes quick enough and one of the major issues is that the bricks needed to help build those homes are still going up in price.
“Back in 2020, a thousand bricks were costing around £595, and they now cost about £795 for the same brick.”
Nicol also explained that the number of prime-age buyers, which is around 35 years old, has also increased by 235,000 growing from around 4.2 million in 2010 to 4.435 million today.
He said that this growing number of buyers comes on top of growth in the number of households which have increased from 26 million in 2010, to 28 million today.
Nicol, who has Nicol & Co branches in Droitwich, Malvern and Worcester, added: “We don’t think this market is going to drop.
“We think it may well slow down slightly, as the increase in interest rates has an impact on buyers’ borrowing power. But we’re not going to see a drop off in interest in properties.”
The Nicol & Co vlog called Matt’s Insights can be accessed at www.nicolandco.co.uk/news.