Housing demand at eleven year high

Demand for housing reached an eleven year high in June, according to the National Association of Estate Agents.

Related topics:  Finance News
Rozi Jones
27th July 2015
house growth graph this is actually the green one

Its report found that 439 house hunters were registered on average per NAEA member branch, 15% more than in May when 383 house hunters were registered per branch and the highest since August 2004 when 582 were recorded.

Despite a massive jump in demand, supply of housing stock fell marginally from May, to just 44 houses available per branch (compared to 46 in May), widening the growing gap between supply and demand.

Activity remained consistent, with nine sales made on average per branch for the second month running. However, the number of sales made to first time buyers declined in June, with the group accounting for just 24% of sales, compared to 29% in May.

Mark Hayward, managing director, National Association of Estate Agents, said:

“What we’re seeing is a market that lulled over the General Election period, coming back to life in full force. Buyers are feeling more confident and those who put their plans on hold over the Election and political aftermath have kicked off their hunt, causing this massive jump in demand. There’s also an impetus to buy right now in light of the impending interest rate rise as buyers fight to buy and fix mortgage rates. But the fact that demand is at an eleven year high without the housing stock to fuel it, is bad news for the market.

“Although activity is still slow, it’s very promising to see that the surge in demand and dip in supply hasn’t caused activity to halt, and houses are still being sold. However, the growing gap between supply and demand is worrying and clearly demonstrates that more needs to be done to plug this. The Election was full of promises to build more houses, but now those promises need to be put into bricks and mortar to respond to demand.”

Stephen Smith, Director, Legal & General Mortgage Club & Housing, commented:

“The rift between supply and demand in the UK housing market is continuing to widen, which is driving up prices for aspiring homeowners. The market is likely to become increasingly competitive in future months, as low inflation, low rates and rising wages will act as a catalyst for demand.

"Unless the Government builds more houses so that supply can keep pace with demand, homeownership will become unaffordable for many. We need around 250,000 extra houses per year to stem house price inflation and bring homeownership within reach for those looking to buy.”

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