What's happening to property supply and demand in the UK this month?

publication date: Jun 13, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Let's assess supply and demand for Property in the UK in June 2014

The most important thing to know when trying to understand property price trends is how many people are buying versus selling. Highest prices are achieved when two or more chase the same property and fall when two sellers are chasing the same buyer

Download June’s property price summary

Kate Faulkner comments on Demand for Property: 

“It looks like demand may be starting to drop off. Although more people are looking via Rightmove, the NAEA aren’t seeing this translating into more sales and people aren’t applying for quite so many mortgages either. Part of this will be down to the ‘doom and gloom’ that we may be in a (mostly invisible and made up) ‘bubble’ scaring buyers off and partly due to some of the pent up demand now having bought and others realising ‘rushing in’ now when they are competing with other buyers may not be wise.”

Download June's property price summary

Summary of what the reports say about demand for property:
Rightmove “Demand for housing remains strong with email enquiries to agents on Rightmove up by nearly 20% so far in 2014 compared to the same period last year. (May 14)” 
NAEA “The average number of house hunters registering with NAEA agents increased by twenty 
percent in April, from an average of 313 house hunters in March to 392 in April. However, 
NAEA member agents also reported a decrease in the average number of sales agreed per 
branch, down from ten in March to nine in April. (April 2014)” 
Hometrack “The growth in demand is starting to moderate. (May 14)” 
RICS “Growth in new buyer enquiries remains firmly positive across all parts of the UK. (April 14)” 
Nationwide “First time buyers are playing an increasingly important role in the housing market recovery. First time buyers accounted for 48% of house purchase activity in March, a record high well above the long run average of 38%. Data from DCLG suggests that the Help to Buy scheme is providing support to first time buyers, who accounted for over 80% of Help to Buy loans to 
date. However, the modest numbers involved so far suggest that Help to Buy is unlikely to be 
the main factor behind the recent pickup in the wider housing market. For example, 12,853 
Help to Buy mortgages were completed in Q1 (6,327 under the mortgage guarantee scheme 
and 6,526 under the shared equity scheme), equivalent to around 9% of total mortgage 
completions over the period. (May 14)” 
Halifax “On an annual basis, housing demand is still strong and continues to be supported by a 
strengthening economic recovery. (May 14)” 
Bank of England “The number of loan approvals for house purchase was 62,918 in April, compared to the average of 70,132 over the previous six months. (April 14)” 
Severn Trent “The average number of daily transactions in May is up 18% on the same time last year. It is also up 8.5% on April’s average daily transactions. The day after the bank holiday was the second highest number of transactions in a day since 2010. (May 14)” 
Land Registry “In the months November 2013 to February 2014, sales volumes averaged 72,080 transactions per month. This is an increase from the same period a year earlier, when sales volumes averaged 52,331 per month. (April 14)” 

Download June's property price summary

...And with demand looking like it's starting to drop off this is effecting supply. 

Kate Faulkner comments on Supply of Property: 
“Although the lack of supply is reported by the indices and long term is an issue, I’m seeing much more stock coming onto the market in the North London area I’ve been looking. Where I was getting may be one or two properties coming through every week, I am now getting that many – or more – a day. Agents are more keen to ‘book me in’ for an appointment rather than tell me when to turn up ‘or it’s gone’. So overall, although supply remains tight, there are certainly pockets of areas where people are deciding to cash in on the rises. This includes people who rented because they couldn’t sell. ARLA are seeing a 4% decrease this quarter in people choosing to let due to market conditions.”

Download June's property price summary

What the indices are saying about the supply of property in June 2014:
Rightmove “The supply of new properties to market is still unable to keep pace with demand, and whilst earlier months this year saw an encouraging increase in the number of new sellers, this month has seen the number of properties coming to market fall by 1% compared to April, as the bank holidays affect seller activity. (May 14)” 
Home.co.uk “The overall supply of properties entering the sales market continues to fall: down 6% across the UK over the last year. The regional market of East Anglia contracted most over the last 12 months, by 21%, in terms of the number of sales properties entering the market. (May 14)” 
NAEA “The supply of housing in April increased slightly from 42 in March to 45 in April, ending a sequence of six consecutive monthly falls. This number is still far below the figure of 61 properties available per branch at the same time last year. (April 14)” 
Hometrack “The lack of supply continues to support pricing levels. (May 14)” 
RICS “This dearth of new instructions appears quite widespread with nine of the twelve regions that we monitor seeing a decline in the number of new sellers coming to market over the course of the month. (April 14)”

Download June's property price summary

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