High level of demand, but lack of supply.
The number of people actively looking for property in September reached the highest level since 2004, the latest Housing Market Report from the National Association of Estate Agents (NAEA) shows.
The NAEA report for September found that member agents reported an average of 406 house hunters at each branch – the highest number recorded since October 2004, when an average of 511 buyers were reported.
Encouragingly, the research found that first time buyers now account for 30 per cent of all sales NAEA estate agents reported for the month of September, up from 28 per cent in August and 20 per cent in July.
However, despite the rise in demand from prospective purchasers, transaction levels are being held back by a lack of housing supply, despite a marginal increase in the volume of properties available in September.
The report found that the supply of housing rose from 49 residential properties available in August to 51 in September – a seasonally low figure for September. The last time that supply levels were lower for September was in 2002, when 43 homes were available per NAEA member branch.
Despite the supply-demand imbalance, most properties are being sold for under the sellers original asking price, with just 4 percent of properties sold in September for over the original asking price, and a stark 82 per cent were sold for less than asking – 16 per cent more than in July.
The shortage of homes on the market in relation to demand partly reflects the fact that house building levels have been at an historical low in recent years, placing upward pressure on property prices in the process, particularly in London and the South East.
But with the Government committed to increasing the supply of new homes, there is a genuine hope among property professionals that the overall number of properties coming onto the market may rise in the short to medium term.