The stamp duty holiday “caught Bellway and its competitors napping”, the former Bellway manager said. “They weren’t expecting that move and I think they also weren’t expecting the demand that suddenly, I think exploded would be a good word, into the market, the demand for properties.”
This surge in demand has sent prices soaring. Until June 2021, prices were inflated by up to 13% and although this tailed off to just over 10% through October, demand for properties is drastically outstripping supply across the industry. Indeed, “we’re still seeing gazumping going on, multiple viewings and final bids, closed bids, crazy things that were happening in 2005-2006”, the specialist said.
A slowdown was forecast when the stamp duty holiday ended in September, but in reality there was no sign of any real cooling. “The second-hand market, partly… because of lack of stock, is, in the right locations, absolutely flying,” the expert added. Experts are surprised by the continued growth in sales prices, although, as they noted, there are stark regional variances. The industry as a whole logged 10% growth through end-November 2021, but only 5.1% in London compared with 12.9% in the southwest. Price growth strongly correlates with the house price to earnings ratio, which we were told is an important number to monitor.
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