Survey reveals potential high demand for properties in UK in next five years
Some 5% of UK households plan to buy a property in the next year and a further 20% plan to do so within the next five years, according to a new survey.
Some 28% indicate they want to buy a house or apartment in more than five years’ time, 17% of households say they have no plans to buy at any stage and 30% of households are undecided.
The survey, conducted by Markit and Ipsos MORI for real estate firm Knight Frank, suggests that around 1.35 million households are planning to buy a residence in the next year, highlighting the rising demand for housing across the country.
If all potential purchasers were to achieve a sale, this would mark an 18%, or 200,000, rise in transactions over the next 12 months, in line with the Office of Budget Responsibility’s forecasts released at the Budget last month.
However this demand could overwhelm supply coming onto the market, suggesting that some households may not achieve their goal of buying a property, Knight Frank says.
‘Some three quarters of home movers plan to put their house on the market, but there is additional demand from those moving out of the rental sector, and first time buyers, as well as investors,’ the report points out.
‘Supply has been very constrained in the market in recent years and this may well continue to be the case. In turn, this lack of supply is putting upward pressure on prices. It is interesting to note that the suggestion of increased activity in the market chimes with the momentum being seen in the wider economy, not least the improvement in wage growth,’ it explains.
It also points out that the more upbeat economic picture may serve to help offset some of the effects of higher interest rates and adds that the Bank of England is now widely expected to start raising rates next year.
Of those planning to buy who already own a home, three quarters will sell their existing property to fund the new purchase. Some 4% of these households plan to purchase an additional property as a second home or holiday home and 5% plan to buy an investment or rental property, the survey shows.
On a regional basis, the survey suggests that demand for property from households in the East of England will be amongst the strongest across the country in the next 12 months, with 7.9% of households indicating their intention to buy a property within the next year, followed by households in the East Midlands at 7.7%. In London, 6.9% of households plan to purchase a home within 12 months, a potential 214,281 transactions.
Households in the North East of England and Scotland are the least likely to be moving home before April 2015, with just 2.1% of households in each region saying they plan to buy a property in the next 12 months.
Article courtesy of PropertyWire