What's supply and demand looking like at the start of 2015

publication date: Jan 12, 2015
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

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What are the indices such as NAEA and Agency Express indicating about supply and demand

Supply and demand are key concepts withing the property world and in particular the world of property prices. If more people want to buy than sell prices will go up and vice versa.

Download my full property price summary for January 2015

Kate's comments on demand this month
“The data on demand is a mixed bag this month with the ‘lead’ indicators suggesting a real slowdown while the ‘historic’ measures show that demand is higher in 2014 than 2013. Probably the most helpful measure this month is the Severn Trent data which shows there is a slowdown, but so far, this is in line with seasonal trends”

What are the indices saying about demand this month
Rightmove “Buyer demand has tailed off during the second half of the year. (Dec 14)”

NAEA “The number of house hunters registered per branch has declined, to an average of 364 house hunters registered per branch, the lowest number of house hunters recorded since March 2014, when an average of 313 potential buyers were registered. There has also been a decline in the number of sales agreed in November, with agents reporting an average of eight agreed sales per branch in November compared to nine in October. The number of sales agreed per branch has remained fairly static since May 2014, whereby only 8 or 9 sales have been agreed per branch per month. (Nov 14)”

RICS “Weaker demand is again reflected in a further slowing in sales figures. (Nov 14)”

Halifax “The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer. (Dec 14)”

Agency Express “For properties ‘Sold’ the North West recorded an increase of 7.40% followed by the South West of 1.40%. East Anglia fell by 14.10% and the North East fell by 6.40%, for properties sold. Both recorded their largest decline for the month since November 2011. In Scotland, properties ‘Sold’ fell by 18.3%. (Nov 14)”

Acadata “During 2014 as a whole, completed house sales climbed 18% on 2013 levels – reaching the highest volume witnessed since 2007. While the bulk of this uplift happened in the first half of the year, 2014 finished at a sprint too – with completed house sales in December jumping 17% on the previous month, against the usual seasonal tide, as the Chancellor’s remodelling of the age-old stamp duty barrier flooded the market with buoyed consumer confidence. (Dec 14)”

Bank of England “The number of loan approvals for house purchase was 59,029 in November, compared to the average of 63,191 over the previous six months. (Dec 14)”

Severn Trent “The average number of daily transactions in December was down 10.4% on the same period last year. It was also down 32.2% on November’s average daily transactions. The downturn between November and December last year was also around 30% so it’s in line with seasonal trends. (Dec 14)”

Land Registry “In the months June 2014 to September 2014, sales volumes averaged 81,055 transactions per month. This is an increase from the same period a year earlier, when sales volumes averaged 72,386 per month. (Nov 14)”

With Severn Trent indicating a slowdown in demand this also affects supply.

Here are my comments on supply this month
“The general gist of the reports suggest new instructions are on the rise for some areas, such as Central England and London/South East, but in other areas, such as the North East, stock levels are tighter. The new year data will give an indication of whether the market will continue to recover from seven years of recession and help us to see if the stamp duty changes will just end up costing the government much needed tax revenue or boost the number of sales which will add to tax revenues.” 

What are the indices about supply of property
Rightmove “In the last four weeks, 76,823 new sellers have come to market, down 4% on the same period a year ago and the second consecutive month that there has been a year-on-year fall. (Dec 14)”

Home.co.uk “The supply of property for sale overall has not increased significantly, rising by around just 7% over the course of the year. However, exceptional rises in supply have been observed in London and the South East (+39% and +13% respectively). Scotland has also experienced a rise in supply post-referendum of 9%. (Dec 14)”

NAEA “The supply of properties per branch is down from the previous month, with just 50 available properties per branch recorded in November compared with 53 in October. The decline in both demand and supply suggests a slightly levelling out of the market. (Nov 14)”

RICS “The number of new instructions registered with estate agents at a headline level contracted yet again, albeit only marginally, during November. This has been an ongoing theme for the past year and it remains to be seen whether the change in stamp duty will encourage more property onto the market. Significantly, the average volume of inventories on surveyors’ books remains close to the record low. (Nov 14)”

Agency Express “Central England recorded their best figure to date for November rising by 12.30% and London recorded a robust rise of 24.80% for new listings ‘For Sale’. This month’s largest declines were made by East Anglia falling by 21.70% for new listings ‘For Sale’ and the North East fell by 25.70%. Both recorded their largest decline for the month since November 2011. In Scotland, new listings ‘For Sale’ fell by 10.2%. (Nov 14)”

Download my full property price summary for January 2015

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