The desire to move home is showing no signs of slowing down as 48% of all buyers say that they have been considering a move for over a year, with half (50%) hoping to complete within the next six months, according to the latest buyer and seller survey by property group Savills.
This desire to move as quickly as possible is the strongest seen at any other point since the start of the pandemic, including when the market reopened in May 2020.
A net balance of +24% of respondents stated that they are more committed to moving within the next three months, while longer term demand also remains strong, a net balance of +32% are committed to moving in the next two years.
Savills conducted the survey between 9 and 15 February and collated responses from 840 registered buyers and sellers.
Lack of stock dominates the market
Almost all buyers (90%) say that the lack of available housing stock is having a negative effect on their ability to purchase a property, with 65% noting a significant effect. This is being felt the most at the top end of the market, with 94% of buyers with a budget of £1 million and above reporting a lack of choice.
At the same time, buyers across the prime market remain undeterred by the Bank of England’s increases to interest rates, reflecting the high levels of equity at the top end of the market. More than three quarters (77%) said that recent rate rises had no impact on their budget.
Frances Clacy, research analyst at Savills, said: “This shortage of stock has left would-be sellers in a difficult situation as many have been reluctant to bring their home onto the market when they’re yet to find another to move into, making it an opportune time for would-be vendors to list their home.
“The imbalance of supply and demand, coupled with existing high levels of property wealth, will continue to fuel price growth in the coming months, despite the recent rate rises.
“However, some cohorts are feeling the squeeze on finances more than others as high levels of price growth has eroded affordability in some areas, particularly in high-value locations. Those who are planning to upsize (26%) and purchase in London (28%) both say they now have a smaller budget as a result of rising rates. Realistic pricing will become more important as the market starts to feel the knock-on effect of the overall increase to the cost of living.”
Buyer preferences in the face of soaring energy prices
With energy bills predicted to rise by almost £700 a year, 71% of respondents said EPC ratings were important in their home buying decision making, with 19% responding as “very important”.
But despite an increased concern for their homes energy rating, Georgian (19.5%) and Victorian (18.9%) properties continue to be the most sought after, closely followed by new build (16.2%). 30% of homes in England and Wales built pre-war still carry an EPC rating of E or below, increasing to 47% for those built pre-1900, according to Savills research.
Pandemic preferences here to stay
The so-called ‘race for space’ that has driven the UK’s housing market over the past 18 months is expected to remain a core component of the market going forward. Still, buyers are prioritising proximity to parks and open spaces, shops and local amenities, and even the pub, over school and work.
This is even the case for buyers in London, who are continuing to prioritise open space over proximity to train and tube stations, despite more workers returning to offices. However, the number of buyers who are prioritising being near to their work place has risen from 15% in September 2021 to 23% in February 2022.
Clacy continued: “What started as a lockdown trend has now firmly solidified itself as a key component of the prime UK regional market. Almost two years on, buyers are still prioritising lifestyle choices and proximity to leisure facilities, over school and work, with no sign of this reversing any time soon.
“But in London, it’s a slightly different picture, as buyers start to give greater consideration to where they live in proximity to their work place.
“Return to normal for Londoners and would-be Londoners was stalled by the resurgence of the pandemic over Christmas, but with all restrictions now dropped, we can expect to see demand for best in class flats and pieds-a-terre return in cities.”
