The first six months of 2021 saw a “buyer frenzy” in the housing market leading to a major shortfall in the number of homes available for sale, as well as a hike in property prices.
Rightmove said this was “the busiest ever” first half of a year, with 140,000 more sales being agreed and 85,000 fewer new listings than the long-term average.
The average property price in the UK was pushed to a new record high for the fourth consecutive month, hitting £338,447 ($467,681). This is the largest monthly rise at this time of year since July 2007.
The report said if 225,000 more homes had been available, it would have corrected a stark imbalance between supply and demand, and stabilised this price growth.
Watch: How much money do I need to buy a house?
“This stark shortfall, along with frenzied buyer activity, is fuelling record high prices and leading to record lows in available stock for sale,” Rightmove said.
“With high activity levels continuing despite the June stamp duty deadline now passing, there is an urgent need for these low stocks of property for sale to be rebuilt in order for price stability to return,” it added.
The threshold for stamp duty, a tax on property transactions in England and Northern Ireland, was at £500,000 until 30 June for residential purchases.
The "holiday" on the duty was meant to boost the property market by helping buyers whose finances were affected by the pandemic. It was initially meant to end in March but was extended to June by chancellor Rishi Sunak.
Rightmove predicts the number of completed sales that HMRC will publish later this week is on course to be around 800,000, which would beat the previous record of 795,000 set in 2007.
Tim Bannister, Rightmove’s director of property data, said this surge in demand is due to the pandemic’s "side-effect of a new focus on what one’s home needs to provide."
Demand has also been boosted by the ongoing creation of new households, and property being seen as an asset to hold, with historically low returns from many other forms of investment.
Meanwhile, the report said homes with at least four beds faced the biggest imbalance, seeing a 39% surge in sales and 15% fall in numbers coming to market versus 2019.
This resulted in an average price hike of 6.7% in the last six months.
Mass-market three bed sector sees 28% jump in sales while suffering 10% drop in new supply versus 2019, with prices jumping up by 6.9% so far in 2021 .
A bright spot for hard-pressed first-time buyers is that the sector of two bedrooms and fewer has virtually the same supply as in 2019, down just 1%.
The stock shortage is less acute, and with prices up by a more modest 3.4%, "this could be a relative buying opportunity for those looking to get onto the property ladder," the report said.
Estate agent Chestertons’ market analysis also showed that the first six months of 2021 saw the highest aggregate number of sales for any first half year period.
“Although the end of the first taper of the stamp duty holiday has passed, the market is still fuelled by house hunters keen to find a new home as well as city workers who are returning in anticipation of offices reopening,” said Cory Askew, Chestertons’ head of sales.
Watch: 95% mortgages explained - what are they and how do they work