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The 5 factors shaping housing demand

Confused about the property market at the moment? You’re not alone! We speak to property experts, Savills, to discuss how things like strong buyer demand, the pandemic and a lack of suitable properties for sale has really turbocharged the property market over recent years.

Economic pressures and geopolitical uncertainty has meant that the housing market has become increasingly stratified. In the mainstream market property sales have fallen back from the record highs of the last couple of years and are now in line with pre-pandemic levels.

In the prime market however, where buyers tend to be more insulated from increased living costs, activity has remained well above normal throughout 2021 and so far this year. Despite the economic headwinds, the appetite to make a move remains strong among buyers of prime property.

But what are buyers looking for now? Savill’s most recent survey of buyers and sellers of prime property in April provides an insight on how priorities are evolving and sets out the top five factors of significance:

1. There is a sustained commitment to move

There is still a high level of commitment to moving, with 22 per cent of those surveyed stating an intention to do so within the next 12 months, up from 15 per cent in September last year, and 28 per cent within the next two years, nearly double the percentage of respondents reporting the same intent in September.

2. Lack of suitable property to buy remains a challenge

As has been the case for the last couple of years, buyers are feeling the gap in supply and demand with 63 per cent reporting it to be an issue. Despite more homes coming to the market now, the large pool of unmet demand means that competition for good quality, well-priced properties is still prevalent – particularly in the most popular locations, such as the Cotswolds, and pretty towns including the likes of Stockbridge, Marlborough and Warminster.

3. The squeeze on household finances has yet to impact budgets

In terms of interest rate rises, 80 per cent of respondents said that recent increases had no impact on their budget. Just 4 per cent said their budget had significantly decreased, although 25 per cent of those in London said their budget had decreased. For 74 per cent of respondents, the rising cost of living had no effect on their budget. However, 47 per cent of those looking at property below £500,000 said their budget had decreased.

4. Hybrid working is here to stay

While many of us have returned to offices this year, we are less likely to be tied to a five-day commute. The survey indicated a notable shift in working patterns, with only 16 per cent of respondents commuting three or more days a week, compared to 58 per cent before the pandemic. This means that regional towns and cities, such as Bath, which were previously off the radar for commuters, have become a genuinely viable option.

5. Sustainability is more important

In terms of the property itself, buyers are paying more attention to energy performance. 64 per cent of those who responded to our survey see EPC ratings as an important factor in their decision-making. A third said they had become more important to them over the last year, indicating that increasingly, investing in the energy performance of our homes will be as much about future-proofing its value as reducing running costs.

Abingdon, OX13

Freehold, Council Tax Band = G

Guide price: £2.95 million

Stockbridge, SO20

Freehold, Council Tax Band = G

Guide price: £2.95 million

Fordingbridge, SP6

Freehold, Council Tax Band = H

Guide price: £2 million

Marlborough, SN8

Freehold, Council Tax Band = G

Guide price: £3 million

If you’re looking to make the most of the market conditions this summer, Savills would be delighted to advise you. Here are the contact details for their various locations across the UK:

  • Liz McLean Head of Residential Savills Newbury – 01635 277 705, liz.mclean@savills.com
  • Charles Elsmore-Wickens Head of Office Savills Summertown – 01865 339 702, cewickens@savills.com
  • Steven Moore Head of Office Savills Winchester – 01962 834 010, smoore@savills.com
  • James McKillop Head of Residential Savills Salisbury – 01722 426 822, james.mckillop@savills.com
  • Camilla Elwell London Country House Department – 020 7016 3718,  camilla.elwell@savills.com

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