The report also found that the number of house-hunters registered per estate agent branch dropped in September, following a period of "high and unsustainable demand in July and August".
On average, there were 342 prospective buyers registered at each NAEA member branch in September. This is a drop of 16% from the 408 recorded in August, and a 26% drop from July when demand reached an eleven year high with average 462 house-hunters per branch.
The number of properties available to buy dropped marginally to 37 per member branch in September. This followed a huge fall in the availability of housing stock the month before, when the number of properties available fell from 55 in July to 38 in August – a decrease of 31%.
Mark Hayward, managing director, National Association of Estate Agents, said:
“It’s obviously very positive to see that the number of sales being made to FTBs has risen this month. We’re seeing a whole range of new competitive mortgage products coming on to the market, which is likely to be encouraging first steppers to take the plunge, as well as the fact that the ‘impending’ interest rate rise has now been pushed back to next year at the very earliest.
“However, in order to ensure there is enough affordable housing on the market for FTBs, we need the issue of supply and demand to be addressed in a big way. Until substantial numbers of new houses are built, we won’t see every FTB reach the bottom rung of the ladder."
Mark Hayward continued:
“If we could just get supply and demand to meet in the middle, the housing market would be functional again; it’s a real issue across the market at the moment. Developers are struggling to secure planning permission and labour is in short supply. This means that the army of house-hunters looking to buy has out-grown the number of housing available at a rapid rate, and it’s completely unsustainable.
“The introduction of the Housing and Planning Bill – announced last week – is good news however. It includes an extension of the Right to Buy to Housing Association properties, which should help to increase supply in the housing market as homes that are sold through the scheme will be replaced on a one-for-one basis. Nonetheless it’s really important that in urban areas, replacement properties are built within the same local authority boundaries as the original homes that were sold, so that stock is replenished evenly across city regions.
“Demand has dropped 16% this month, and FTBs are making up a larger proportion of sales – which does indicate that the market is on the road to recovery, but it simply isn’t enough. Even with the promises outlined in the Housing and Planning Bill – there are still nine house-hunters fighting for each property and new housing just isn’t being built quickly enough.”
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented:
“It’s positive to see that Government initiatives and the availability of mortgages have supported first-time buyers, allowing more people to get onto the housing ladder. However, more should be done at the other end of the spectrum to help bring properties onto the market higher up the chain.
"Second time buyers are holding onto properties for longer, choosing to extend, improve, or even rent out their homes, instead of selling them on. Similarly, last time buyers are not being encouraged to downsize, again blocking more properties from returning to the market.
"Despite the fact that many people may wish to move, there simply isn’t enough appropriate homes available for them to move into. This, coupled with the inhibitive cost of moving, is causing a bottleneck. Incentives such as removing stamp duty for those downsizing need to be considered to increase the supply of properties on the market in the short term, as well as encouraging more house building in the mid to long term.”
