The Housing Market in 2021: The pandemic, current trends and what's next - Gráinne Gilmore - Head of Research, Zoopla 7th October 2021
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The Housing Market in 2021: The pandemic, current trends and what’s next Gráinne Gilmore – Head of Research, Zoopla 7th October 2021
2 Activity and prices New Homes Outlook
Pandemic impact on sales volumes..
3
Number of UK residential transactions (m)
2.00
1.80
1.60
No. transactions million
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
….and prices
Private & Confidential 4
Private & Confidential
Average growth +6.1%, 2.2% early last year
…not all price growth the same
5
Where are prices rising most… next
6 Where are prices rising most strongly? Most affordable markets, headroom for growth – even relative affordability.. Hastings What’s driving?
1. Pandemic-driven ‘Reassessment of Home’
7
01 Families ‘bursting at the seams’ needing space for work,
schooling, entertainment and assuming more flexible working
02 First time buyers seeking space and value for money – choice
of 2 bed flat v moving out to 3 bed houses
03 Older, long tenure, equity rich households releasing capital
and relocating for family/quality of life reasons
2. Stamp duty holidays…
8
Is it all about stamp duty? Yes and no…
9
The ‘search for space’ effect on pricing by type of home 10 Pre-pandemic, level pegging Now rising demand flats London
But supply …
11
Active market, investors, FTBs… erosion of stock
HBs – forward salesFast-moving market…
12
Speed of sales13
..regional variations
Time to sell (days on market to SSTC)
5 year average Aug-21
60
51
50
40
29
30 27 27
25 26
22 23 23
21 22
20
14
10
0
Scotland
S West
Wales
Y&H
N West
W Mids
E Mids
UK
N East
East
S East
London
Longest time to sell in London, global city14 New Homes
New Homes demand
15
Demand for new homes mirrors resales - % of all sales up to 15%16 Scale of demand vs new-build completions Resulting in forward sales… Completions steady next 2 years, but not near 300k (indicated by starts)
17
New build concentration by local authority
Starts in last 12m as a % all housing sales in
last 12 months
Completions18 New Zoopla Research study: The pandemic’s impact on demand for housing and the desire to move has further to run Changes in working patterns a catalyst
19
Over a fifth of households ‘more eager’ to move in next 2 years
22% 59%
More eager or much Say the pandemic has
6%
Less eager to move home
more eager to move not changed their in next 2 years
home in next 2 years attitude to moving
(8% ‘much more’ eager home in next 2
and 14% ‘more’ eager) years.
1,000 respondents20
‘Home’ factors drive desire to move
Primary driving force for an increased desire to move home?
46% 28%
Home related factors Personal factors
18%
Work related factors
e.g. the need for a e.g. the need to be e.g. changing working
different sort of home or near friends/ family, patterns, more flexibility.
space etc. re-evaluate values
and desires etc.
No major variations by type of household or tenure21 What are new homes buyers looking for? Latest research, home type but also outside space: Garage, Parking..
22
Who is ‘more eager’ to move in next 2 years?
Much more eager More eager
18-24 Under 45’s – younger households tend to
35-44 have fewer/poorer housing options and were
disconnected from friends over lockdowns
55-64
Pre-family and younger families but
Young family
less so empty nesters who have space/right
Empty nesters location
Professional occupations (ABC1) with more
Professionals (ABC1)
flexibility to work at home – see below
More impetus from Londoners
Rest of UK
Home owner Broad balance between renters and owners
No change in work pattern
Strong link between moving intent
and WFH
Major city
More eagerness in cities and larger
Suburb or suburban town towns
Rural
0 5 10 15 20 25 30 35 40 45 50 55
% more eager to move23 Looking where…? xxxx
24 Outlook
25 Increasing costs..
26
Outlook for market
End of Help to Buy amid
Planning changes? Gov
challenging economic
Rising Costs, temporary, or response ‘paused’ but will be
landscape – furlough, inflation,
baked in? delivered under new leaders
– sentiment (industry
at MHCLG
response)
Affordability of average- Energy efficiency as a point
Scarcity of homes for sale
priced homes of differentiationOutlook
27
01 Transactions remain higher than average in 2022
02 Price growth in positive territory, but down from current levels –
market remains regionalised
03 Eyes on policy – planning reform – supplyThank you
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Gráinne Gilmore
grainne.gilmore@zoopla.co.ukYou can also read
