UK experiencing two speed market split between new builds and second hand homes
The UK property market is running at two speeds in which second hand properties stagnate while the sale of new homes continues to rise, it is suggested.
A clear line is starting to divide the property market into two groups and the trend is likely to continue throughout the summer and possibly until the end of the year, according to Adam Hesse, land and planning director at land agent Aston Mead.
‘The second hand market continues to be hampered by a lack of supply, with the number of properties on estate agents’ books hovering just above a record low. However, the building of new homes is powering ahead, with some companies reporting completion levels higher than at any time since 2008,’ he said.
‘For buyers, the difference with a new home is that the developer absolutely has to sell. Second hand sellers may only agree a price if they find a house to move to, and there is always the possibility of getting gazumped. But in the new homes market, the developer is driven and motivated to ensure that a sale goes ahead,’ he explained.
His analysis comes after the Royal Institution of Chartered Surveyors (RICS) predicted a fairly flat market in the months ahead, while the UK’s largest house builder Barratt released figures indicating that it will build more homes in 2017 than the in the previous eight years.
‘Some buyers will be committed to purchasing an older home, whatever the cost. But there are those who could easily be tempted into buying a new home, particularly considering the high level of service and support they receive from the companies concerned, as well as the benefit of brand new fixtures and fittings, the latest energy saving technology, and schemes like Help to Buy,’ Hesse pointed out.
He believes that currently uncertainty created by the snap election and the fallout of changes to stamp duty continues to provide a challenge for the UK housing market as a whole.
‘But the fact that developers are guaranteed sellers of the increasing number of new homes now available means that a two speed market is likely to run throughout the summer and perhaps until the end of the year,’ he added.