Housing stock shortages putting upward pressure on prices, says Propertymark

Shortages of homes for sale and to rent are adding to the cost-of-living squeeze by putting an upward pressure on housing costs, according to a body representing estate and letting agents.

Landlords seeing increases to their monthly mortgage repayments are also having to raise rents, Propertymark said.

Despite some recent signs of high demand easing in the sales market, the average number of properties listed by member agents was 22 during the first half of this year, down from 30 in 2021 and 37 in 2019, the organisation added.

An average of 38% of properties were being sold above asking price in the first half of 2022, up from 24% in 2021 and 5% in 2019, it said.

There has also been evidence of an upward pressure on private rental prices.

An average of 76% of letting agents reported rising rents month on month across the first half of 2022, compared with 57% in 2021 and 37% in 2019.

The typical number of new prospective tenants registering per member branch so far in 2022 has been 98 – up from 85 a year earlier and 68 in the first half of 2019.

Propertymark said 80% of agents said the number of landlords leaving the sector has increased over the past three years.

It pointed out that the squeeze on housing comes on top of other cost-of-living pressures for households, including rising mortgage costs.

Propertymark chief executive Nathan Emerson highlighted a “lack of incentives keeping landlords in the sector” and said further intervention is needed.

He said: “Mortgages, including buy-to-let, which are on short-term, fixed contracts, have been at historically low interest rate levels for years but are now rising sharply.

“Property owners seeing increases to their monthly repayments are having to raise rents. This is leaving many renters in difficulty due to affordability at a time where other costs are also rising.

“Despite inflation and interest rate rises, the sales market has so far continued to remain buoyant during turbulent times, with homes under offer extremely quickly.

“However, with a continued rise in the number of buyers, stock levels need to increase.”

Mr Emerson said slight increases in stock may be seen during the second half of 2022, but they “will barely scratch the surface of what is needed” without further intervention.