However supply has been unable to keep up with this level of demand. Although the number of new properties for sale has risen 3.1% on the month, it has actually declined by nearly a fifth in the last year. This has resulted in nearly twelve buyers chasing every property to come onto the market.
UK property prices have risen 6.4% annually to reach an average of £217,072. There has been a slight seasonal dip of 0.3% on the month which reflects the general trend for the summer market, however there is an overall upwards trajectory in house prices.
First-time buyer house prices are also rising steeply on an annual basis, up by 7.7%. Prices for first-time buyers are up 0.8% on the month to an average of £167,794.
The number of new first-time buyers is up 7.2% on last July but there has been a small monthly dip in registrations of 0.2%, perhaps driven by the sharp rise in starter home house prices. First-time buyers made up 41.3% of all mortgages written in June, a sharp drop from 46.5% a year earlier. This could be a result of the rising cost of a mortgage which has increased 11.4% on the year for first-time buyers to reach £135,583 from £121,681 a year ago.
The average property price in London has declined 1.4% on the month to £510,141 and is up just 4.2% on the year which is lower than the national increase seen. Sales transactions have risen 7.7% on the month but have declined by 4.5% since last June which illustrates how strong the London property market was a year ago.
The North of London remains the most expensive postcode area in which to buy, however the North West has seen the greatest price increase in the last year, up 47.2%. The North West is also the area that has seen the greatest increase in transactions on an annual basis, up 31.8%.
Paul Smith, CEO of haart, commented:
“We saw a surge in activity when Mark Carney announced that an interest rate rise was on the cards as people looked to take advantage of some of the lowest mortgage rates on record and fix at this level before they increased. Now the economic landscape has changed following the market slowdown in China we expect greater calm on the demand side, but true balance will not be achieved until more homes start to come onto the market. Registrations in the UK are up 5.3% in the last month alone. However, supply has not kept apace; although we have seen instructions rise by 1.4% in July, supply has actually fallen by 15% annually and in London supply is down by a fifth compared to last year.
“Urgent action is needed to tackle the shortage of stock and allow people to move. A form of land relief to boost building activity is one way to do this. The new All-Party Parliamentary Group for Housing and Planning needs to proactively drive national action and make decisions which may not be universally popular in order to tackle the current crisis. If not, we will still be in the same situation come the next election.”
