UK new property supply falls and buyers grow

UK new property supply falls and buyers grow

10 Jul 2019

UK housing market

The housing markets in the UK continue to recover from last year slowdown where the homes at the top end of the prime locations are doing better but the supply is shrinking, and in all price range the vendors are hesitating due to political factors, but the number of buyers increased 21 percent in the year to May showing vendors are benefiting from the imbalance created by supply and demand.  

The UK property market is widely affected by the North-South divide, and its impact can be seen in the supply and demand where the price continues to grow in the North.  As per the new listings data by a website (, in June, 61,775 new properties were posted for sale, which was down from 70,775 of the same month last year. The figure finds the decline in monthly basis by 1.9 percent. The research by Housesimple finds the list was dominated by the sellers from the North, and the highest number of new listings was made by sellers from Bootle and Bolton.

The impact of Brexit on the real estate markets

Brexit will amend the supply chains in the construction sector in areas like labor and goods. There are many other challenges which the builders will have to face that can lead to delay in the completion of projects by up to 60 percent, mainly, due to the inconsistent supply of material.  Experts claim the issues may be similar to the ones during the financial crash –when a number of buyers were interested in getting a home under Help-to-buy scheme, and people had deposits for homes but it became difficult for the builders to deliver projects due to difficulty in getting bricks. Some construction firms stockpiled material in the anticipation of shortage and some are using alternative material like plasterboard. The industry will face a skill shortage as a number of foreign investors and workers are returning home as they can earn more at home.

The political uncertainty and skill shortage are weighing on the builders where the first quarter of the year started with development on 36,630 new build dwellings with a fall of 9 percent, in comparison to, the last three months as per the government figure.  The developments in the new starts have been low, while, the current trends are looking like a potential issue in the real estate markets.

The government planned to supply 300,000 homes in a year by 2020 but the data from the IHS Markit show the construction fell to one of the weakest in ten years and the government is preparing to use non-traditional methods to construct homes. Recently, the project by Japanese developer was sanctioned by the Homes England, where they will deliver modular homes to handle supply housing shortage.

Data suggests the government will not be able to achieve the target of 300,000 homes by 2020, and wrong housing at the wrong locations can risk buildings, on the other hand,  the sellers are hindered by the uncertainties created by Brexit and related issues like economic performance and change in market trends.

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