Supply and demand are intrinsically linked in business, economics and by proxy the property industry. Simply put, if more more people want to buy properties than sell them prices will rise and vice versa. It's therefore important to keep tabs on the supply and demand situation in the market.
Download my full property price summary for March 2015
Kate's comments on demand this month
“So some indices are saying sales volumes are on the up, some on the way down. Actually what it looks like is happening, is volumes for January and February are up on the preceding months, but versus the previous year, volumes do look like they are slightly down. We need a good quarter’s data though before we can make any conclusions on likely trends for 2015.”
What are the indices saying about demand this month
Rightmove “Housing demand is at a record high with visits to Rightmove hitting over 100 million in January for the first time ever. For the right property at the right price, demand is outstripping supply and leading to some further upwards price pressure. However there is a limit to what the majority are willing or can afford to pay, especially with the tighter lending criteria. In locations where there is a tight-stock market some different tactics are required for a successful move as competition gets fiercer for quality homes as demand increases. (Feb 15)”
NAEA “NAEA members reported that the number of house hunters recorded per branch is at a 10 month low. Following a ten year high for demand seen in December, the January report showed a decrease from the 2014 average across the year of 365 house-hunters per branch, to just 353 at each branch. This indicates that we’re experiencing a slump in interest. The slump could be attributed to uncertainty in the run up to the General Election. Activity is expected to drop off in the lead up, and the January Housing Market Report illustrates what could be the start of this.
“There was a rise in the number of sales agreed in January, following a seasonal decline in December, with agents reporting an average of eight sales agreed per branch in January.
“The percentage of sales made to first time buyers (FTBs) remained the same as levels recorded in December 2014, with the group accounting for 26% of sales agreed compared to 24% in November. (Jan 15)”
Agency Express “The regions recording the largest increases in properties ‘Sold’ during February include the North East +79.4%; West Midlands +78.5%; East Anglia +64.9%; Scotland +62.8%; Yorkshire & Humber +55.7% and Central England +55.1%. (Feb 15)”
Acadata “While sales volumes across the south are slightly more sluggish, the North is the current powerhouse of activity, with completed home sales up 7.0% year-on-year during Q4 2014, followed by 4.1% annual increase in Yorkshire & Humberside. Yorkshire & Humberside have seen the most significant jump in flat sales during Q4 2014, up 18.6% year-on-year. Overall, in England and Wales, completed home sales in January dipped a slight 0.5% compared to a year ago. (Feb 15)”
Bank of England “The number of loan approvals for house purchase was 60,786 in January, compared to the average of 61,666 over the previous six months. (Jan 15)”
Severn Trent “The average number of daily transactions in January was down 12.5% year on year. It was, however, up 20.6% on December’s average daily transactions. Only one day in January were there more transactions than the equivalent day last year. (Jan 15)”
Land Registry “In the months August 2014 to November 2014, sales volumes averaged 79,549 transactions per month. This is an increase from the same period a year earlier, when sales volumes averaged 77,694 per month. (Jan 15)”
Kate's my comments on supply this month
“Although thoughts on demand vary, everyone agrees stock availability is, in the main, poor. The only way we can increase stock levels moving forward is through new homes, and in my view, agents need to expand into other services, such as financial, block management, working with housing associations and local authorities to survive into the future.”
What are the indices about supply of property
Rightmove “Quality stock is in short supply in some locations, which is unsurprising given the structural under-supply of homes and the recovery from the economic downturn. The 31% increase in housing transactions in the last two years in England and Wales has outstripped the 11% rise in the number of new properties coming to market. Rightmove statistics show that the average available stock for sale per estate agency branch for the last two months (57 and 58 properties) has never been lower at the beginning of the year. New seller numbers this month are also 4% below those recorded in the same period in 2014. (Feb 15)”
Home.co.uk “Supply of property for sale nationwide shows a significant uptick: 19% more properties were placed on the market this January than in January 2014. Greater London leads the way with a massive 51% increase, ahead of the South East (+28%), Scotland (+19%) and East Anglia (+18%). High prices are encouraging potential vendors to commit, although there are clear signs that supply is beginning to outpace demand in London, as indicated by a rising median time on market (20 days longer than in Feb. 2014). (Feb 15)”
NAEA “For the past three years, the supply of property in January has decreased from levels seen each December. This January, supply has decreased to 44 properties available per branch, compared to 45 in December and 50 in November 2014. (Jan 15)”
Halifax “The supply of both new and second hand homes available for sale remains low; another factor that is likely to be supporting house prices. Supply remains tight despite housebuilding in England increasing for the second consecutive year in 2014 and a recent rise in the number of properties coming on to the market. (Feb 15)”
Agency Express “The regions recording the largest increases in new listings of properties ‘For Sale’ during February include the East Midlands +58.2%; Scotland +58%; South West +40.5%; Yorkshire & Humber +39.6% and the North West +39.4%. (Feb 15)”
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