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Kate's price summary analyses the various property indices' reports on supply and demand for property and includes data from the Bank of England, Rightmove and Nationwide.
Kate Faulkner's comments on property demand:
“Demand is clearly still remaining high this year. As the introduction of MMR put people off / held them back from buying in the second half of last year, especially in expensive areas such as London, the second half of the year could be much better volume wise. We will have to wait for several month’s data to find out if this increased demand will help to fuel house price rises in the rest of the regions, rather than just London and the South East, or if the price increases achieved prior to the credit crunch in some areas were true asset bubbles, driven by unsustainable lending.”
Download the full price report for August 15
What are the indices are reporting about demand for property?:
Rightmove “Demand remains high, with both visits to the Rightmove website and enquiries to estate agents up by 22% in June compared to the same period a year ago. (Jul 15)”
Home.co.uk “A resurgence of buyer demand continues to drive prices higher, predominantly in London and the South of England, bolstering confidence amongst vendors. (Jul 15)”
NAEA “Average of 439 house-hunters registered per branch in June, up from 383 in May. June witnessed the highest demand for housing for eleven years. In August 2004, 582 house hunters were recorded. Agents reported a decrease in sales to FTBs, with only a quarter (24%) of sales made to this group; this is a 17% drop from last month. (Jun 15)”
Nationwide “The outlook on the demand side remains encouraging. Employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up. With consumer confidence buoyant and mortgage rates still close to all-time lows, demand for housing is likely to firm up in the quarters ahead. (Jul 15)”
Halifax “This combination of well-supported demand and tight supply is likely to ensure that house price growth remains relatively strong in the near-term. (Jul 15)”
Agency Express “Out of the twelve regions recorded by the Property Activity Index, seven reported declines in properties ‘sold’, with the largest decline recorded in London, falling by -19.4%. The East Midlands recorded their best July since the Index’s records began, with an increase of +4.1% and the North West recorded the highest overall increase of +10.6%. (Jul 15)”
Bank of England “The number of loan approvals for house purchase was 66,582 in June, compared to the average of 62,971 over the previous six months. (Jun 15)”
Land Registry “In the months January 2015 to April 2015, sales volumes averaged 57,918 transactions per month. This is a decrease from the same period a year earlier, when sales volumes averaged 66,949 per month. (Jun 15)”
Download the full price report for August 15
Kate's comments on the supply of property:
“No conflict with the indices from a supply side: we haven’t enough homes for the number of buyers and we need to build more quickly! Many people blame agents for the increase in property prices, which is somewhat ridiculous as if agents have the power to increase prices, then why do they ever fall? What people forget too is that for agents and those in the buying/selling business to grow, they really need volumes to rise, and as yet, we haven’t recovered in most areas to volume levels achieved before the credit crunch, mainly because there are just not enough properties to sell. Property price increases off the back of low volumes isn’t much of a substitute, and makes it virtually impossible to increase business unless adding other services or acquiring competitor businesses.”
What the indices are saying about supply:
Rightmove “The number of properties coming to market is running at a weekly run-rate 10.6% below the same period in 2014. The biggest drop-off in fresh supply is in the typical first-time buyer sector with two bedrooms or fewer, the sector where demand was already at its highest compared to available properties. The shortage of suitable property for sale highlights the need for an urgent and marked increase in the overall housing stock to help keep pace with the growth in household formation. (Jul 15)”
Home.co.uk “The supply of property for sale remains low across the UK; down by 6% (June 2015 vs. June 2014). Only in the North East region, where the recovery is still in its infancy, do we see a significant rise in supply (up 6% compared to a year ago) and this has served to make prices dip this month. (Jul 15)”
NAEA “The supply of properties has decreased marginally, from 46 per NAEA member branch in May, to 44 per branch in June. (Jun 15)”
Nationwide “It remains unclear whether activity on the supply side will catch up with demand. The number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term. (Jul 15)”
Halifax “Supply is highly restricted with the stock of homes available for sale falling further to new record lows. (Jul 15)”
Agency Express “During July, ten regions recorded a drop in new listings ‘for sale’ with London witnessing a sharp drop, with new listings falling by -51.7%. Listings ‘for sale’ in the North East increased by +4.3%. (Jul 15)”
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