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Housing stock at an all time low


kate_faulkner_housingRightmove: “Housing shortage results in not enough sellers and rising prices.”
Home.co.uk: “Londoners say prices too high as properties pile up.”
NAEA: “Almost three quarters of homes sold for less than asking price.”
Nationwide: “Annual house price growth continues to soften.”
Halifax: “House prices in the three months to February were 2.6 per cent higher than in the preceding three months.”
Agency Express: “Further growth during February.”
Acadata: “House prices still increasing but at more moderate levels.”
Land Registry: “January data shows a monthly price increase of 1.3 per cent.”

Views on demand vary, but everyone agrees that stock availability is, in the main, poor.”

low_housing_stockKate says: “We are entering probably the first ‘normal’ year in the property market since before the crash. No boom, no bust, just buyers and sellers, hopefully matching for the first time. Most importantly, we aren’t seeing the panic buying we saw back in 2013/14, so the market is calming down. According to the Halifax report/ONS: “Housebuilding increased in 2014 with the number of completions in England rising by 8 per cent from 109,490 in 2013 to 118,760 in 2014.” But despite more sellers coming onto the market, we have too many agents – on and offline – chasing too few properties. Without a dramatic increase in the number of homes built for sale, consolidation is bound to be the main issue for agents moving forward – who will survive the fall out?


Home.co.uk: “The North-South divide has further widened over the last 12 months as a result of rapid growth in Greater London and the Home Counties while prices in the North stagnate. Moreover, the North East, North West, Yorkshire and Wales have yet to show any real signs of price recovery. Average prices in the North West, North East, Wales and Yorkshire all remain essentially unchanged from their February 2010 values, a remarkably poor performance compared to the 18 per cent rise overall for England and Wales over the same time frame.”

Acadata: “The average annual rate of change for each region, except Wales, fell in January compared to the previous month. Greater London had the largest drop in the annual rate of house price growth, down 3.0 per cent on the previous month, followed by the East Midlands, down 1.6 per cent. The pattern of change in the housing market, which began in London seven months ago, of a decline in the rate of house price growth, is now being repeated across the remainder of England.”

Hometrack: “At a city level, the annual rate of growth ranges from 4.1 per cent in Glasgow to 16.3 per cent in Aberdeen. For the last five months the weakest performing cities have been  registering positive growth on a rising trend. The impetus for national house price growth is emerging from the lower growth cities where house prices have been recovering for a limited period. The profile of the recovery in house prices varies. There are two distinct groups of cities; first, where house prices bottomed out in 2008/9 and have been recovering for 5-6 years. Second are cities where prices stopped falling as late as 2013 and the recovery has been shorter, running for the last 2-3 years. 14 cities saw house prices trough in 2008/9 with the strongest gains in southern England. The lowest growth has been seen in cities such as Manchester and Birmingham where the performance of house prices is more reliant on the local economy and growth in incomes and employment. The high growth, high value cities, such as, London, Bristol, Oxford and Cambridge, all continue to register slower house price inflation.”

Land Registry: “The region with the most significant annual price increase is London with a movement of 12.0 per cent. North East saw the lowest annual price growth with a movement of 0.1 per cent. North West experienced the greatest monthly price rise with a movement of 2.6 per cent. Yorkshire & The Humber saw the largest monthly decrease with a fall of 1.5 per cent.”

Kate says: “There is much talk about a ‘housing crisis’ going into the election and it’s bound to continue to be a ‘hot topic’. The problem is, the information given is London and South East centric. These regional figures show that some areas are not recovering at all, others have +5-10 per cent growth. Politicians shouldn’t just be focusing on areas where there is a housing crisis, but areas where there isn’t. Some areas, like Nottingham, don’t have the level of crisis we see elsewhere. But the media coverage and rhetoric has convinced people in Nottingham the crisis exists there too – yet house prices, on average are the same as they were 10 years ago. We all need to work hard to make sure local people know if there is a problem or not, otherwise we will just convince first time buyers they can’t afford to ever buy, ensuring they stay in the rental market for longer than needed.”

Demand for Property

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 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.”

NAEA: “NAEA members reported that the number of house hunters recorded per branch is at a 10 month low. Following a 10 year high for demand in December, the January report showed a decrease from the 2014 average 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 Report illustrates what could be the start of this.”

Agency Express: “The regions recording the largest increases in properties ‘Sold’ during February include the North East +79.4 per cent; West Midlands +78.5 per cent; East Anglia +64.9 per cent; Scotland +62.8 per cent; Yorkshire & Humber +55.7 per cent and Central England +55.1 per cent.”

A decline in house price growth which began in London, is now repeated across the rest of England.”

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 per cent year-on-year during Q4 2014, followed by 4.1 per cent annual increase in Yorkshire & Humberside. Yorkshire & Humberside have seen the most significant jump in flat sales during Q4 2014, up 18.6 per cent year-on-year. Overall, in England and Wales, completed home sales in January dipped a slight 0.5 per cent 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.” 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.”

Kate says: “Some indices are saying sales volumes are on the up, some on the way down. Actually what it looks like is that 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.”

Supply of Property

Rightmove: “Quality stock is in short supply in some locations, unsurprising given the structural under-supply of homes and the recovery from the economic downturn. The 31 per cent increase in housing transactions in the last two years in England and Wales has outstripped the 11 per cent rise in the number of new properties coming to market. 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 sellers this month are also 4 per cent below those in the same period in 2014.”

Home.co.uk: “Supply of property for sale nationwide shows a significant uptick: 19 per cent more properties were placed on the market this January than in January 2014. Greater London leads the way with a massive 51 per cent increase, ahead of the South East (+28 per cent), Scotland (+19 per cent) and East Anglia (+18 per cent). 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).”

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.”

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.”

Agency Express: “The regions recording the largest increases in new listings of properties ‘For Sale’ during February include the East Midlands +58.2 per cent; Scotland +58 per cent; South West +40.5 per cent; Yorkshire & Humber +39.6 per cent and the North West +39.4 per cent. (Feb 15)”

Kate says: “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.”

Kate Faulkner, Property Market Analyst and Commentator
Email: kate@designsonproperty.co.uk
Telephone: 01652 641722

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