If more more people want to buy houses than get rid of them prices will rise and vice versa. We therefore need to peruse the current supply and demand situation.
Download my full property price summary for June 2015
Kate Faulkner comments on Supply of Property:
“The lack of supply will be a major feature of the property market moving forward with an ageing population and people living in their properties for longer as a result. Many people seem to live in their ‘forever home’ for 25 years or more before they look to downsize. And the industry will need to make a shift - with over 50% of people owning their homes outright, ie without a mortgage, giving full financial advice on how to trade down and what to do with the equity released is a strategy all agents need to be considering, as the mortgage business available (38% of sales were cash last month) is likely to continue to fall.”
What are the indices say about demand for property?
NAEA “In the build up to the General Election, demand in April remained similar to the previous month with 344 house hunters registered per branch (343 in March), however this was down significantly from April last year, when 392 house hunters were recorded per member branch. This can be in part attributed to uncertainty around the property market for buyers in the lead up to the General Election.
“The average percentage of sales made to First Time Buyers (FTBs) increased from 22% in March, to 26% in April. (Apr 15)”
Halifax “The ongoing economic recovery, increasing employment, real earnings growth and very low mortgage rates, are all supporting housing demand. This combination has kept annual house price inflation well above earnings growth although activity levels are subdued. (May 15)”
Agency Express “Five of the twelve regions recorded by the Property Activity Index reported increases in properties ‘Sold’. Scotland was the most prominent performer reporting record bests for May, rising by 15.6%. The largest declines made for properties ‘Sold’ in this month’s Property Activity Index were recorded by the North East and the South East. The North East fell by -10.50%, however it did see an increase of 0.70% over the three month rolling period. Properties ‘Sold’ in South East fell by -7% marking the region’s largest decline for the month since the Index’s first records in 2007. (May 15)”
Acadata “Home sale completions made healthy headway with a 5% uplift in the month to April - in face of what was thought to be a looming political impasse. However, there was a slowdown when we look at the first quarter of 2015 as a whole, with Q1 witnessing a 10% year-on-year drop in the number of homes sold. Activity was certainly more restrained in the months running up to the General Election. (Apr 15)”
Hometrack “Housing demand has been spurred by record low mortgage rates and an improving economic outlook encouraging more buyers to enter the market. (Apr 15)”
Bank of England “The number of loan approvals for house purchase was 68,076 in April, compared to the average of 60,679 over the previous six months. (Apr 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)"
Land Registry “In the months November 2014 to February 2015, sales volumes averaged 64,196 transactions per month. This is a decrease from the same period a year earlier, when sales volumes averaged 73,156 per month. (Apr 15)”
Kate's my comments on supply this month
“The lack of supply will be a major feature of the property market moving forward with an ageing population and people living in their properties for longer as a result. Many people seem to live in their ‘forever home’ for 25 years or more before they look to downsize. And the industry will need to make a shift - with over 50% of people owning their homes outright, ie without a mortgage, giving full financial advice on how to trade down and what to do with the equity released is a strategy all agents need to be considering, as the mortgage business available (38% of sales were cash last month) is likely to continue to fall.”
What are the indices saying about supply of property
Rightmove “In the three months after the May 2010 election there was a 17% jump in the number of properties coming to market compared to the previous quarter. With a majority government in power and record spring traffic on Rightmove, early indications from estate agents suggest that the next quarter could see another surge in property coming to market. (May 15)”
Home.co.uk “Supply of property for sale remains low compared to pre-crisis levels (45% less than it was seven years ago) and this tendency looks set to continue. Greater London and the South East show the largest increases year-on-year (+16% and +13% respectively), but the total volume entering the market remains restricted and the figure for the UK overall is a mere 8%. (May 15)”
NAEA “Supply was down 10 per cent from last month, with 43 properties available per branch compared to 48 last month. This April was down 2 from 45 April 2014. This is also a result of the uncertainty around the property market in the lead up to the Election. (Apr 15)”
Halifax “Housing supply remains extremely tight with the stock of properties available for sale currently at its lowest level for many years. (May 15)”
Agency Express “Regional month on month data recorded by the Property Activity Index reveals that London may have already seen the effect of the surge, with new listings ‘For Sale’ rising 10.5%. Further increases have also been recorded for Yorkshire and Humberside rising by 7.6% and Scotland by7%. (May 15)”
Download my full property price summary for June 2015
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