Housing Demand Soared to 11 year high
published on 04/08/2015
The UK housing market continues to be propped up by growing demand from buyers, which the National Association of Estate Agents (NAEA) says is now an 11-year high, fuelled by greater political stability, a strengthening domestic economy, record-low mortgage borrowing rates, rising employment levels and Government housing schemes such as Help to Buy.
The NAEA’s latest monthly report found 439 house hunters were registered on average per NAEA member branch in June, 15 per cent more than in May when 383 house hunters were registered per branch and the highest since August 2004 when 582 were recorded.
“What we’re seeing is a market that lulled over the general election period, coming back to life in full force,” said the NAEA’s Mark Hayward. “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 while demand increases, the supply of housing coming onto the market continues to plummet, with the NAEA reporting that housing stock had fallen to just 44 houses available per branch, widening the growing gap between supply and demand.
“The fact that demand is at an eleven year high without the housing stock to fuel it, is bad news for the market,” added Hayward.
This acute shortage of supply may push house prices even higher in the coming months, with the Royal Institution of Chartered Surveyors (RICS) now projecting 25 per cent capital growth over the next five years.
“Prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable,” said Simon Rubinsohn of RICS. “The feedback we are getting in the survey, which points to prices at a headline rising by another 25 per cent over the next five years, suggests that there is no real confidence that the measures necessary to deliver a meaningful boost to new supply will be put in place any time soon.”