The pandemic has fuelled buyer appetite for more space, leading to a sharp drop in the number of three and four-bedroom houses on the market.
The level of family houses for sale has hit a five-year low as buyer demand for properties offering more space significantly outstrips the supply of homes on the market.
The number of four-bedroom homes for sale has dived by more than 20% year-on-year in all regions of the UK, with Scotland seeing a near-60% fall.
The availability of three-bedroom properties is also down across the board, with northern regions the most affected.
Three-bedroom homes now account for just a quarter of all properties listed for sale, down from more than a third in 2017, according to our latest House Price Index.
Overall, houses account for 59% of listings, compared with 76% four years earlier.Download the full report
Why is this happening?
There is a mismatch between the level of homes for sale and buyer appetite across most of the market.
Home buyer appetite is up 27.5% so far this year compared with average levels in 2020.
Meanwhile, the total number of homes listed for sale in the first months of this year is 19% down on the 2020 average, despite the 50-day closure of the housing market in England (and longer in Wales and Scotland) last year.
But the situation is particularly acute for three and four-bedroom houses due to the pandemic-led ‘search for space’.
Family homes remain the most in-demand type of property, but the desire for them is not being matched by new listings, leading to dwindling volume of the properties on estate agents’ books.
What’s the background?
All regions have seen at least a 20% fall in the availability of family homes. Scotland has seen the biggest drop in four-bedroom properties, with listings diving by 58%, followed by the south west at 42% and the north west and south west at 42% and 40% respectively.
Northern regions have also seen a sharp fall in the availability of three-bedroom homes, with Scotland, Wales, the north west and the north east most affected, along with the south west.
What could it mean for you?
With buyer demand very strong, if you are thinking of selling a property, particularly a three or four-bedroom house, you could be in pole position to agree a sale.
And with the tight supply of family homes for sale, your property could stand out if you list it now.
The good news if you’re a buyer is that the tide is turning when it comes to the supply of homes for sale. Our data suggests that more properties have started coming onto the market since schools restarted.
You could still take advantage of the stamp duty holiday on homes costing up to £500,000 if you start looking now.
But you are likely to face stiff competition for family homes, so register with us to receive alerts when a property meeting your criteria comes onto the market to help you get ahead.
While properties are moving quickly from being listed to ‘sale agreed’ stage, the time it takes to complete, when ownership legally changes hands, is still taking longer than before the pandemic.
So it’s worth preparing as much as you can in advance to increase your chances of benefitting from the stamp duty holiday.
What's the outlook?
Grainne Gilmore, head of research at Zoopla, said: “The imbalance between supply and demand, which is creating a very tight market for family homes, will start to ease in the near term as homeowners becoming increasingly comfortable opening their homes to viewings, in turn building supply of new stock.
“The scale of buyer demand will also moderate from the peaks seen after Easter as lockdowns end across the country and there is some return to pre-pandemic normality.”
But Gilmore adds that the fundamental imbalance will remain, with the search for space among homeowners set to continue, particularly as some office-based businesses are now confirming their working practices will change for the longer-term.
Top three takeaways
- The supply of family homes for sale has hit a five-year low
- The number of four-bedroom homes on the market has dived by more than 20% year-on-year in all regions of the UK, with Scotland seeing a near-60% fall
- The supply of three-bedroom properties is also down across the board, with northern regions the most affected