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Housing supply remains the problem

Kate FaulknerKate’s view on individual indices

Rightmove: Useful to measure average time to sell and sellers’ sentiment.
Nationwide: Measures mortgaged property prices and affordability across the UK.
Halifax: Measures mortgaged prices and produces individual research, ie seaside towns.
NAEA: Tracks first time buyer sales and provides supply/demand figures from agents.
RICS: Excellent for supply/demand analysis and on forecasting the market.
BBA: Provides a huge amount of data on the economy/prices/transactions and financing.
Agency Express: Analyses for sale/sold board, good for ‘current’ market trends.
Hometrack: City analysis across the UK and compares current prices annually and quarterly.
LSL: Analyses Land Registry figures, separates out London, good analysis on transactions.


Latest National Market Movements

Kate says:
“The current market stats are all showing that property prices are up year on year and the increases are higher than the annual averages seen over the last ten years. This isn’t a huge surprise given that we’ve spent most of the last 10 years in a credit crunch, but property prices are now recovering. The surprise figure is the Halifax increase which is much higher than any others, suggesting an anomaly. Actual price increases are around 5-6 per cent year-on-year based on mortgaged and cash sales, while prices for mortgaged properties have grown at a lower rate up a little less at 3.7 per cent (Nationwide). With seller price increases (Rightmove) at a higher rate than actual rises, it suggests current sellers and agents are expecting to see prices rise at an increasing rate.”


Rightmove: “Strongest December since 2006 as Rightmove forecasts six per cent rise next year.”
NAEA: “Demand for housing soars as sales to first time buyers plunges.”
RICS: “Lack of stock continuing to drive price growth.”
Nationwide: “House price growth picks up as 2015 draws to a close.”
Halifax: “Quarterly house price growth remains below two per cent.”
LSL: “House prices break new record, even as monthly growth falters.”
Hometrack: “City house price growth ends year on the up.”
Land Registry: “The annual price change now stands at 5.6 per cent.”

Country Property Price Differences

Kate says:
“Country data shows that Welsh prices are up year on year by 3.7 per cent, but growth lags behind the annual average of 5.8 per cent. At this rate, as property prices are still 12 per cent lower than they were before the credit crunch hit, it will take another three years (2018) for Welsh prices to recover to pre-credit crunch levels. This would mean property prices would have been in recession for 10 years in the area. Scotland’s index is created differently so can’t be compared to other country performance, but currently prices are seeing some East Anglia are seeing the lowest number. Looking forward to agreed sales, this doesn’t look like it will change much, although there seems to be quite a decline in sales agreed in Wales.”
Rightmove: “Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up. (Dec 15).”
NAEA: “Sales to first time buyers (FTBs) decreased this month, with only two in ten (21 per cent) sales made to the group. This is a decrease of 10 per cent from October, when sales to FTBs were at their highest in six years. The average number of prospective house buyers increased in November, with 403 house-hunters registered per branch, compared to 336 in October – the highest since August this year when there were an average 408 registered per branch. (Nov 15).”
RICS: “New buyer enquiries rose across the majority of areas during the month with London and East Anglia the only exceptions, both areas saw a modest decline. (Nov 15).”
Agency Express: “Properties ‘Sold’ fell by -29.9 per cent, and the report shows the fall in figures for December 2015 are slightly bigger than those recorded in 2014, where we witnessed a decline of -26.5 per cent in properties ‘Sold’. (Dec 15).”
Bank of England: “The number of loan approvals for house purchase was 70,410 in November, compared to the average of 68,428 over the previous six months. (Nov 15).”
BBA: “The number of mortgage approvals in November was 25 per cent higher than a year ago, with re-mortgaging up 31 per cent and house purchase up 20 per cent per cent. (Nov 15).”
Land Registry: “In the months June 2015 to September 2015, sales volumes averaged 79,315 transactions per month. This is a decrease from the same period a year earlier, when sales volumes averaged 83,095 per month. (Nov 15).

Supply of Property

Kate says:
“Lack of stock continues to be a key feature of the market. Sales per branch have been maintained throughout the year at between 8-10 properties, according to the NAEA and stock levels, although low again, have been fairly steady, but with sales versus 2014 lower than 2015 (LSL) this shows there just aren’t enough properties available for those keen to buy.

The likelihood of more properties coming onto the market from existing home sellers in 2016 seems low, so only a fall in demand, perhaps from less investors or a vast increase in homebuilding (currently only supplying 10 per cent of sales) is going to have any impact on the overall demand and supply.” NAEA: “The available supply of housing decreased marginally in November, following an increase in October. This month, the average number of houses available per branch was 41, compared to 43 in October and 37 the previous month. (Nov 15).”
RICS: “New instructions to sell fell for the tenth consecutive month with 8 per cent of respondents reporting a decrease in new stock coming up for sale. (Nov 15).”
Nationwide: “Surveyors have continued to report a dearth of properties, with the number of available homes reportedly at the lowest level since the late 1970s. (Nov 15).”
Halifax: “There remains a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale. (Dec 15).”
LSL: “Home sales fall 15 per cent in November, with completed sales for the year still 3.4 per cent behind this point in 2014. (Nov 15).”
Agency Express: “New listings ‘For Sale’ fell by -45.3 per cent, the report also shows the fall in figures for December 2015 are slightly bigger than those recorded in 2014, where we witnessed a decline of -41.1 per cent in new listings ‘For Sale’. (Dec 15).”
Hometrack: “The most important feature of the housing market over the second half of 2015 has been a chronic shortage of homes for sale. We expect the scarcity of homes for sale to remain a feature of the housing market in 2016. This will only ease once we see greater levels of output from home builders, higher levels of activity amongst existing home owners and lower demand from buyers that have nothing to sell, in particular investors. (Nov 15).”

Kate Faulkner, Property Market Analyst and Commentator
Email: [email protected] Telephone: 01652 641722

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