46% of Brits believe house prices mean it’s a sellers’ market

46% of Brits believe it’s a sellers’ market, while just 17% believe it’s a buyers’ market. Could increasing house prices be the reason? We take a look.

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'For Sale' sign outside of a terraced house in the UK

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A report from MoneySuperMarket indicates that 46% of Brits believe it’s a sellers’ housing market. In stark contrast, a mere 17% believe it’s a buyers’ market. Could increasing house prices be the reason? We take a look.

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What is a buyers’ market and a sellers’ market?

A buyers’ housing market occurs when there’s a surplus of housing on the market and low demand. It could also be that there’s high demand, but the number of houses available is more than enough to satisfy the demand. House prices tend to be lower and the majority of houses can sit unsold for quite some time.

A sellers’ housing market occurs when there’s a shortage of housing. This is caused by either an increase in aspiring homeowners or a reduced rate of house construction. This causes house prices to increase because of high demand, and even with the high prices, homes still sell quickly.

Is it a buyers’ or sellers’ market 2021?

Based on the definitions above and the current state of the housing market, it’s safe to say that we are in a seller’s market.

Estate agent Rightmove reported that 2021 has seen the busiest ever first six months of the year. The period saw an increase in house sales caused by the stamp duty holiday and low borrowing rates. However, the number of house listings was lower than the long-term average.

Demand has continued to soar, but the housing supply is not currently high enough to address the shortage. This could be because the government has not yet met its house-building target. Additionally, prices for home building materials are also very highly currently, making it less affordable to construct multiple houses. For these and other reasons, house prices are at a record high, and it’s uncertain when they might go down.

Following the stamp duty holiday deadline, MoneySuperMarket conducted research and discovered that general mortgage searches had fallen by 5.2% in the last 14 days of June and the first 14 days of July. Demand remains steady, probably helped by the government’s mortgage guarantee scheme, low borrowing costs and the tapering stamp duty holiday threshold of £250,000 that ends in September. 

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Will 2021 be a buyers’ market?

With low supply, high demand, the tapering stamp duty threshold, the availability of 95% loan to value mortgages and low mortgage rates, the sellers’ market and high house prices are likely to remain for a while.

However, sellers may need to keep in mind that the future is uncertain. The housing market might cool down as the government strives to meet its building target and as mortgage rates rise. However, based on the figures in MoneySuperMarket’s research, this might not happen rapidly.

The bottom line is that the only ideal time to buy a house is when it suits your personal circumstances to do so. When considering a purchase, it’s important to analyse the state of the housing market. But it’s more important to consider your financial situation and make sure you can comfortably afford the house you want to buy.

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