We all know supply and demand is a key tenant of how any market fucntions, if there isn't anyone selling then you can't buy, if there isn't anyone buying then you can't sell. Therefore it's important that we take a look at supply and demand in the UK property market.
Kate's comments on Demand for Property
“A fabulous increase in the number of properties sold +20% according to the Land Registry. With the average mover spending around £8,000 in the first two years of moving in, this is great news for the overall economy - not just agents. However, the leap in demand is causing many issues for buyers and sellers. The Mortgage Market Review has, in some cases, slowed sales, but there are now capacity issues showing in areas such as conveyancing and surveying. This is a problem, as all these roles take time to train for, so from an industry perspective we have to make sure customer service doesn’t suffer due to increased volumes and mortgage advisors, surveyors and legal companies don’t stop building their brand, just because they are too busy, otherwise volumes will soon drop if the market falls.”
What are the indices saying about demand for property?
Rightmove “Indications that pent-up demand remains in spite of summer lull. Enquiries sent to agents are good lead indicators of demand and Rightmove generated over 4 million enquiries in August, the second highest level ever recorded, with only January this year being marginally higher. (Sept 14)”
NAEA “The average number of house hunters registering with NAEA agents increased by one per cent in August, from an average of 368 house hunters in July to 372 in August. However, our agents also reported a decrease in the average number of sales agreed per branch, down from nine in July to eight in August. On a more positive note, the average number of first time buyers significantly increased in August, up from 20 per cent of total sales in July to 28 per cent, an increase of 8 percentage points. (Aug 2014)”
Hometrack “Demand for homes fell by 2.1% this month. The number of new buyers registering with agents has now fallen every month of this quarter, and by 4% over the last four months. (Sept 14)”
RICS “The slightly softer demand picture is noticeable across the majority of the English regions, while in Scotland and Northern Ireland the demand picture remains firmer. (Aug 14)”
Agency Express “In the UK, out of the 12 regions recorded by the index, 9 recorded increases in properties ‘Sold’ and 7 recorded increases in new listings ‘For Sale’. This month’s top performing regions include the South East. Properties coming on to the market rose by 16% and properties ‘Sold’ rose by just over 2% marking their largest rise in sales since May 14. Scotland returns results on par with the South East, reporting increases of +16% for properties ‘Sold’ and +3.3% for new listings ‘For Sale’. The largest declines in this month’s Property Activity Index were made by the East Midlands. After an unseasonal spike in figures during August the region fell by -5.50% on new listings ‘For Sale’ and by -12.5% for properties ‘Sold’. (Sept 14)”
Bank of England “The number of loan approvals for house purchase was 64,212 in August, compared to the average of 65,738 over the previous six months. (Aug 14)”
Severn Trent “The average number of daily transactions in September was down 3.7% on the same time last year. It was, however, up 0.4% on August’s transactions. We would normally anticipate a larger rise than this between August and September as part of usual annual trends. (Sept 14)”
Acadata “We estimate that the number of housing transactions in England & Wales in September 2014 (Land Registry), will total some 82,000. This is a fall of 9% from August levels, but is much in line with the long-term seasonal trend of a decline of 10% in transactions from August to September. The number of sales in September is up 16% on the same month in 2013. The gap between the level of monthly sales in 2014 and 2013 is continuing to narrow, reflecting a possible sustained slowdown in the current market. (Sept 14)”
Land Registry “From March 2014 to June 2014, sales volumes averaged 71,426 transactions per month. This is an increase from the same period last year which averaged 59,556 per month. (Aug 14)”
Here are my comments on the supply of property this month
“Higher levels of supply into the sales market would seem most likely to come from the new build sector in the future. The Hometrack data says people are now staying in their property for 25 years, on average, and with an ageing population that figure may well move higher. Making sure the industry has specialist services for developers and helps buyers to see the benefits of new build versus older properties will be vital for success in the future.”
What are the indices saying about supply of property this month?
Home.co.uk “Across the UK, supply remains historically tight, showing a rise of only 3% on the already record low levels observed 12 months ago. Supply of properties entering the market fell the most in East Anglia over the last 12 months (down 6%). Looking back to 2007, we can see it is actually the Greater London market that has contracted the most (by 65%) over the last seven years, despite a recent surge in property entering the market. Of the regions, the East Anglia and South East property markets have contracted the most (down 63% and 62% respectively). Overall, the mainland UK property marketplace offers 55% less choice to buyers today than it did in 2007. (Sept 14)”
NAEA “The supply of homes for sale in August decreased slightly from the previous month, with an average of 49 properties available per NAEA member branch, compared to 51 in July 2014. With the decline in stock levels, the supply crisis continues to affect the market as demand for property increases. As records show, the number of properties available per member branch has not reached above 60 since May 2013. (Aug 14)”
RICS “Agreed sales fell for the first time since September 2012 and it was the second consecutive decline in new buyer enquiries. (Aug 14)”
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