The National Association of Estate Agents (NAEA) has said that a “better balance” between the number of homes for sale and the number of registered home buyers is emerging.
The latest NAEA October Housing Market Report found that member agents reported an average of 53 properties for sale per branch – 15% higher than the monthly average for the rest of 2014 and the highest number recorded on books since October 2013. An average of 51 properties was recorded per branch in September.
While supply showed signs of an increase, the number of house hunters registered per NAEA member branch fell, from 406 in September to 380 in October, easing the balance between the number of available homes and demand. The average number of homes sold during the month remained static on September figures, at average of 9 sales per NAEA member branch.
The number of first-time buyers recorded fell, decreasing six percentage points in October compared to the previous month’s figures, to 24% of total sales from 30% of total sales in September.
Mark Hayward, managing director at the National Association of Estate Agents, said: “The report shows that there is a better balance emerging between the level of demand and supply, as the number of registered house hunters falls for October, while the average number of available properties registered per branch rises to accommodate those looking to buy. However, both supply and demand is still seasonably low for October.
“The decrease in buyer demand and in particular the decline in first-time buyers, along with a relatively static sales market, could be a direct result of the stricter lending criteria which came into play six months ago at the end of April this year, making it harder for house hunters to access mortgage finance. This has certainly been reported as one possibility by our NAEA member branches.”
When asked if the MMR had led to a direct decrease in the overall number of home buyers since it was introduced six months ago, 79% of NAEA member branches agreed it had affected the current number of buyers. With the exception of September 2014, in which 406 home buyers were recorded on average per branch, the number of house hunters registered per member branch had shown a decrease on figures recorded in April 2014 (392 home buyers) – the month MMR was introduced.
NAEA member branches also said they believed the MMR had particularly affected demand among first-time buyers, with 70% of member branches reporting the implementation of MMR had led to a decrease in the number of first-time buyers since it came into force.
Hayward added: “First-time buyers will be especially more cautious about making a purchase due to the stricter lending criteria now in place, which makes it harder to secure finance.
“In addition, prospective interest rate rises earmarked for 2015 present another factor that will most likely affect demand further, and could particularly discourage first-time buyers. In our October Housing Market survey, 90% of NAEA member agents said that they anticipate a base rate rise to affect demand, with 70% reporting that they had already seen an impact on demand as a direct result.
“Any interest rate rise will affect the cost of borrowing and significantly push-up repayments, putting added pressure on household budgets – another reason many home buyers and FTBs may be acting vigilant.”
