Will The UK Ever Catch Up On The Gap Between Demand & Supply for Homes in 2022?

One of the most complicated businesses in any country is the real estate sector, especially in the UK, where people from across the world are flooding to make their best investment. There have been several ups and downs over the last few years in this space. The drastic changes that take place every now and then have affected the overall pattern of buying and selling properties. It is difficult to determine the rise and fall of demand for different property types across the boroughs of London and the UK.

However, there was a steady flow in the real estate business in 2018 and onward. The covid19 outbreak had a significant impact on the economy of the entire country and the world. Rising unemployment and a drop in other businesses stopped people from involving themselves in approaching new property purchases. To overcome this problem, the government introduced a stamp duty holiday in 2020, where people were exempted from stamp duty for a fixed property price. With the online house valuation tool, the unbiased price of the home can be quoted, making it an effortless sale for both buyers and sellers. 

This encouraged several people to invest in pre-owned and new homes and sold over a million homes that year. It also led to inflation due to the decline in the property count, compared with the massive demand from buyers. People are seen struggling to find new homes to buy or rent in recent times. Housing in the UK has turned into a stagnant issue because of the soaring property prices. This crisis affects the young and new buyers trying to set foot on the property ladder. Based on the statistical data, the UK needs to build about 250,000 new properties to maintain the streak between the demand and supply. 


It is no wonder that there is a constant shift in property prices in the major countries. This has been happening for the last few years. Identifying the key elements that influence the property market was a challenging task initially. The main factors are:

  • Mass unemployment conditions in the neighbourhood where people cannot afford their existing living conditions. 
  • The country’s budget- allocation of money for specific public spending purposes.
  • GDP- the overall economic conditions of the neighbourhood/ country.
  • Inflation- this has been a major issue for over a decade and only became worse during the 2019 lockdown.


The extension of the stamp duty holiday from 2020 till 2021 was a prominent contributor to boosting the real estate business and the nation’s economy. Over 1.5 million homes were sold during this period. The year 2021 showed a record-high number of property sales since 2004. The quick sales in the last year exhausted the number of properties now available in the country. It is not an easy job to gear up the supply to equal the ongoing demand. This will prolong for a while till new builds emerge shortly.


The mismatch in the demand and supply rate has forced the sellers to increase their property prices. Multiple buyers are competing for a single property in the UK due to the declining number of properties available for sale. People who have adopted hybrid working methods are on the lookout for bigger spaces to live. The current situation of the property market is in a position where not more than 28 properties are up for sale every month, which is way lower than the previous year. More than 3.4 million people are on the waiting list to purchase a property in the UK.


The lack of housing units has been a widespread concern affecting the supply-demand ratio in the country for a while now. The number of pre-owned properties is higher than the newly constructed ones. Bringing new builds will be the only solution to break this long housing crisis chain. To overcome this crisis, the government should adopt specific strategies when it comes to planning and other steps for increasing the housing stock:

  • Have a thorough understanding of the current property market and plan the number of households accordingly. Based on the current estimation, about 345,000 new units are required every year to meet the never-ending buyer’s demand.
  • Implement new land buying powers in desirable areas of the UK and then partner with up and coming builders and complete the new residential households for families.
  • Focus more on affordability factors by following an efficient strategy. Beyond the number of houses built, it is also essential to know whether they are affordable too.
  • Building better homes at a fast pace in different parts of the country to quickly escape the crisis.
  • Ensure that the government has sufficient funds to achieve building more stock in the coming years.


The property market sped up and achieved unbelievable feats in the last year. The price of a household in the UK rose steadily in 2021 while this will continue in 2022 and onwards. The prices will elevate by 5.6% initially and rise up to 9% by the end of 2022. The business will be a busy one but will gradually slow down in the coming months. Demand for households will only increase more with time. However, the supply will grow slowly, and it will take a few more years to match the racing gait of individuals’ demand. After the most deadly covid outbreak in 2019 that affected the livelihoods of millions, the government will make sure to introduce more affordable homes alongside the usual posh household units. Predicting the future of demand and supply of properties is not so complex now as the statistics are right in front of everyone. The property supply for demand will entirely depend on the government’s next steps. The number of new builds in the coming days will decide the fate of the property market. If not immediately, the supply rate will eventually catch up with demand.

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