So What Key Factors Have Been Affecting Housing Supply and Demand?
Housing Market Basics
There are several basic economic factors that affect the level of elasticity of demand and supply in the housing market.
If there are more home buyers and investors wanting to make a purchase and there are limited homes available to buy, this will cause prices to increase.
Whenever there is a change in property price, it creates a change in demand, pushing elasticity to its highest.
Incomes of households will have a notable effect on the demand for property. An increase in income may result in higher demand.
People may invest in bigger properties or buy a second property to rent out, which will cause a shift in the housing market supply and demand curve.
Another factor can be down to the lack of new homes or limitations on fixing up existing ones to relist on the property market. This is in large part due to the pandemic and lockdown causing delays with the building materials, construction and the renovation process.
Hopefully, the worst of the pandemic is behind us, so housing stock will likely increase as development and new home construction resumes.
Stock may also increase as people start to move homes. Families may be looking for larger properties with more space, and others will be securing their first home.
According to Zoopla’s Head of Research, people are reassessing their homes following the Coronavirus pandemic last year as they change the way they work and live.
As more people adapt to flexible working routines, there is more leeway to move away from the office.
Due to the lack of new homes on the market, or perhaps financial circumstances have changed – either way, others might look to rent properties, which is great news for buy to let investors and the rental market.
Research by Shawbrook Bank found that two-thirds of landlords (67%) said they are positive about their prospects in the next year.