A survey by estate agent Savills found that nine in 10 aspiring home buyers say that the continued shortage of stock available to buy is stopping them from moving.
Despite dramatic surges in house prices and two thirds of properties selling within a month of going on the market, the number of properties on agents’ books are historically low.
The lack of supply is most intense at the top end of the market, according to the study, which found 71 per cent of buyers looking in the £1 million range were struggling to find anything.
The number of homes for sale is down by a third compared to pre-pandemic levels, according to the latest TwentyCi data, and have been running eight per cent below average since March 2019.
Savills also found that in the face of a more competitive market, buyers are having to hold steady on budgets.
Of those surveyed, four in five buyers said that the three consecutive increases on interest rates over the last couple of months has had no impact on their budget. Almost three quarters said that the rising cost of living has also not had any effect.
Frances Clacy, research analyst at Savills, said: “With the market as competitive as it is, motivated buyers can ill afford to reduce budgets, despite rises to mortgage rates and household bills.
“But most buyers at the top end of the market will have built up equity in their existing home and will be able to fix into more favourable rates and are therefore less impacted by the squeeze. Our analysis also suggests that as many as 30 per cent will effectively be cash buyers.”
But while those at the top end of the market are not feeling the squeeze, a third of first-time buyers said that their budgets had decreased as a result of interest rate rises.
At the same time, 47 per cent of those looking at properties priced below £500,0000 said that their budgets had decreased because of the rising cost of living.
Clancy added: “Rising interest rates limit affordability at the point of purchase, which will especially impact first-time buyers who have less equity to back them and will no longer have the support of the government’s Help to Buy scheme from April 1 next year if looking to buy a new build home.“
Savills’ latest analysis was based on a survey of 1,300 buyers and sellers surveyed in April.
