Supply of available housing at 14-year low - Mortgages - News - Moneyfacts


Supply of available housing at 14-year low

Supply of available housing at 14-year low

Category: Mortgages

Updated: 29/02/2016
First Published: 29/02/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

If you're thinking of buying your first home or even moving up the ladder, you may have noticed a distinct lack of houses available for sale. Not only can this mean it's even harder to find the home of your dreams, but it could be having an unwelcome impact on house prices and subsequent mortgage costs, with the ongoing supply/demand imbalance making it difficult to find an affordable home.

Supply falters as demand soars

New research from the National Association of Estate Agents (NAEA) highlights the extent of this issue, with their latest Housing Market Report showing that the supply of available housing hit its lowest level in 14 years in January, with just 33 houses available per member branch. This is the lowest recorded since December 2002 when just 25 properties were available per estate agent branch, with supply having dwindled in recent months.

In contrast, demand for housing soared during the month, with an average of 453 house hunters registered per branch – the highest recorded since July last year, and an increase of 21% from December, when an average of 374 people were registered. Analysis suggests that much of this has been driven by increased activity from landlords, many of whom are pushing to add to their portfolios and complete the sales before the higher stamp duty levy kicks in in April, with 72% of estate agents reporting an increase in interest from landlords.

Future changes?

However, there's also been a slight increase in demand from first-time buyers (FTBs), with 29% of total sales in January going to those taking the first step on the ladder, an increase of five percentage points from December. This should come as welcome news to those hoping to take the plunge as it suggests that house prices are still at affordable levels, despite many landlords trying to snap up such properties – and hopefully, once landlord demand recedes, more FTB sales should come through.

Mark Hayward, of NAEA, commented on the figures: "Our findings this month reflect what we are all seeing across the market, which is that landlords are trying to complete on sales ahead of the changes to stamp duty on additional homes in April. [Nonetheless], the number of sales made to FTBs has increased this month, and we should expect to see their market share rise after April."

He adds that the continued lack of supply highlights the need for the Government "to push the house building programme to the very top of their agenda and help more FTBs make their first step on to the housing ladder", and it's hoped that this will have the desired effect: a boost in supply will result in less upward pressure on house prices, not to mention more choice for those looking to get on (or move up) the housing ladder, resulting in a healthy and sustainable market for all concerned.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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