If more more people want to buy properties than sell them prices will go up and vice versa. We therefore need to take a look at the supply and demand situation in the current market.
Download my full property price summary for May 2015
Kate's comments on demand this month
“I don’t think the stats really tell us the General Election has had any impact on people’s confidence to buy. I think most who are buying and selling now are doing so because they are ready for the first time or they need to move. Alot of the ‘let’s see what we can get and buy a more expensive property’ sales from the past, I don’t think are around so much these days. This does hold back stock, but while demand isn’t racing away in most areas, it means prices are proving pretty stable too - and that’s not a bad thing after 15 years of huge ups and downs. Ultimately, a slow, but consistent annual growth in property prices each year is the one thing that will give people confidence to buy and sell in higher volumes. Until then, let’s hope the Conservatives crack on with letting builders build.”
What are the indices saying about demand for property
Rightmove “Housing demand continues to burgeon, with Rightmove recording its busiest ever month in March. Website visits were up almost 20% year-on-year, to over 115 million. (Apr 15)”
NAEA “This month, NAEA members reported that the number of house hunters recorded per branch was 343, six per cent lower than February, when there were 366 house-hunters registered per member branch, and 16 percent lower than in September, when demand was at its highest of 406 house hunters per branch.
“This dip is a result of uncertainty around the General Election. Last month 46% of NAEA estate agents warned that the market was cooling in the lead up to the election, and this increased significantly this month to 63% of NAEA agents reporting a slow-down in the market. (Mar 15)”
RICS “While demand looks broadly flat at the headline level, with the RICS New Buyer Enquiries series coming in at -2, this figure hides a very mixed picture across and within different parts of the country as a variety of factors impact upon demand. These developments are leading to a more volatile picture, with Scotland and Northern Ireland the only areas to have seen unbroken growth in demand over the course of the last six months. (Mar 15)”
Agency Express “Only 3 of the 12 UK regions reported increases in properties ‘Sold’. The North East reported their record best for the month rising by 9.4%. ‘Sold’ figures for the South East seemed unaffected by the upcoming Election recording a typical rise of 1.3%. A marginal rise of 0.9% was recorded by the East Midlands exhibiting their largest increase for April since 2012. The largest declines made for properties ‘Sold’ in this month’s Property Activity Index were recorded by Wales and Scotland. Scotland fell by -10.80% and properties ‘Sold’ in Wales fell by -10.30% their largest decline for the month since the Index’s first records in 2007. (Apr 15)”
Bank of England “The number of loan approvals for house purchase was 61,341 in March, compared to the average of 60,303 over the previous six months. (Mar 15)”
Severn Trent “The average number of daily transactions in April was down 1.7% year on year but this is by far the closest it has been to previous years transaction levels since July 2014. It was up by 9.7% on March’s figures which is a larger increase than we would normally expect due to seasonal trending. April included the single highest day for transactions for over a year on April 14th. (Apr 15)"
Acadata “Completed home sales in March 2015 totalled 72,200 - on the surface, this marks a strong 11.6% increase on February, but delving a little deeper reveals this is only half the uplift we would usually expect for the market at this typically animated time of year. Taking Q1 2015 as a whole, we’ve seen 5% fewer completed home sales than in the first quarter of last year. (Mar 15)”
Land Registry “In the months October 2014 to January 2015, sales volumes averaged 71,090 transactions per month. This is a decrease from the same period a year earlier, when sales volumes averaged 76,056 per month. (Mar 15)”
Kate's my comments on supply this month
“Another mixed bag of ‘stock tightening’ and ‘more stock than before’ being reported! London sellers definitely seem spurred on to move more, while this doesn’t seem to be happening everywhere. Again, in the various areas I see day in and day out, more stock is coming onto the market - and stock I’ve seen sitting on the market is now selling, which is good news all round. With the Conservatives now in place, as long as confidence in the property market can continue, hopefully we are in for five years of more housing stock and enough buyers and sellers to keep markets gently rising rather than seeing great gains followed by huge falls - which as we know, isn’t good news for anyone.”
What are the indices saying about supply of property
Rightmove “While the recovering housing market saw an 11% increase in new seller numbers from January to April 2014 compared to the same period in 2013, so far this year’s newly marketed property numbers have slumped and are down by 4% compared with 2014. (Apr 15)”
Home.co.uk “Supply of property for sale in London has risen considerably over the course of the last year (+19%). Supply rises in other regions are either small or negligible and this is stimulating great price growth. (Apr 15)”
NAEA “Member agents have reported that the number of properties available for sale at each branch is up in March, with 48 sales per branch compared to 43 in February. This is up 14% from March 2014, when the number of houses available per branch was 42, but can be attributed to the dip in demand recorded in the lead up to the General Election leading to increased supply.
“The percentage of sales made to first time buyers (FTBs) is down in March, with the group now only accounting for 22% of all sales made in member branches, down from 30% in February. (Mar 15)”
RICS “Supply conditions tightened once again in March with the net balance of new instructions recording a value of -9 following a reading of -8 in February. The contraction in supply was mostly concentrated in England with anecdotal evidence suggesting that election uncertainty may be causing vendors to hold off putting their properties on the market. (Mar 15)”
Agency Express “April which is characteristically a consistent and robust month for the property market fell for the first time in three months, with new listings ‘For Sale’ dropping by -3.8%. (Apr 15)”
Download my full property price summary for May 2015
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