Search for space drives demand for houses

Demand for houses has doubled in the UK as buyers search for more space, driving higher price growth for houses.

If you’re a house owner looking to sell, this soaring demand for houses means that you could be in a great position to secure a quick sale at a good price.

The current high levels of demand are not being matched by the volume of homes available on the market, which means that buyer competition for houses is set to remain high, driving prices up.

Figures in the latest Zoopla House Price Index report show that:

• Interest in houses for sale has more than doubled as the Covid pandemic drives buyers to look for more space.
• The number of people looking to buy a family house has increased by 114% compared against levels typically seen at this time of year from 2017 to 2019.
• The average cost of a house is up by 7.3% during the last year, while the typical price of a flat is up by only 1.4%.

The price growth for houses has outstripped flats in all regions of the country.

What’s the reason for this?

There is no doubt that the demand for houses has been encouraged by the stamp duty holiday, with larger savings available for bigger properties (usually houses).

However, there are other factors at play. Buyers are looking for more space following successive lockdowns and a reassessment of homes and lifestyles. More people are working from home and with the trend likely to remain, at least in some form, people are leaving city centres in favour of more rural locations where there are more houses than flats.

What does this all mean?

If you have a house to sell, now could be the time to act with demand for houses so high.

It could be good news for first-time buyers looking to buy a flat rather than a house, with the cost of flats rising much slower than property values across the wider housing market over the last year. Bear in mind too that there are schemes available to help make purchasing you first home affordable, such as first-time buyer stamp duty relief and Help to Buy.

According to Zoopla research, house price growth for all types of property is expected to reach 6% in the coming months.

But as the stamp duty holiday ends and economic conditions start to become more challenging, it’s set to fall to between 4% and 5% by the end of 2021.

Gráinne Gilmore, head of research at Zoopla, said: “There is a continued drumbeat of demand for more space among buyers, both inside and outside, funnelling demand towards houses, resulting in stronger price growth for these properties. Sellers will need to consider this when it comes to pricing expectations.”