Housing supply drops to lowest levels

April 11, 2016 by Brendan O'Neill

Property Market

The number of properties up for sale has fallen to its lowest level since 2002, according to a report produced by the National Association of Estate Agents (NAEA).

In January 2016, the average number of properties being sold by estate agents was 33, which is the lowest figure in 14 years when that number stood at 25. The average property price in 2002 was £115,940, which is £80,000 lower than the average price today.

Despite the falling supply of housing, the demand for property soared in January, with around 453 people registered with each branch of estate agents, looking for homes. This is an increase of 21% in comparison with the figures of December 2015. This is deemed to be unusual during a period which is traditionally quieter for property sales. As the demand reaches its highest levels since summer 2015, housing prices increase.

According to the NAEA, the rising number of property seekers could have been influenced by more buy-to-let investors looking to buy a property before the new stamp duty rules are introduced. A rise in interest from landlords has been reported by 70% of estate agents in comparison to December’s figures.

As the findings were made public, a report released by the British Bankers’ Association indicated that mortgage borrowing had increased by 38% during the last year. During January, a third of sales were made to first time buyers, which is also an increase on December’s figures.

CeMAP trained mortgage advisers may find that demand has also increased for their knowledge and expertise of the property market.