Despite recent Government announcements to build more new homes, National Association of Estate Agent (NAEA) members do not believe this will be enough to meet demand next year, the NAEA November Housing Market Report suggests.
In its latest report, the NAEA asked estate agents for their predictions on the property market in 2015.
Almost half (46%) of NAEA agents think that demand for property will increase next year, while members were split on whether the same could be said for housing supply. Worrying one in five agents (21%) think levels of stock will decrease next year and third (33 per cent) expect them to stay the same – which, combined with a rise in demand, will mean a heightened housing shortage. However, a contradictory third (33%) of agents were much more optimistic, stating that housing supply would increase next year – albeit still not enough to meet the rising level of demand. When asked what events in 2015 will have the biggest impact on the housing market, the top three greatest influences were base rate rise (34%), changes to stamp duty (32%), and the General Election (32%).
Mark Hayward, managing director of National Association of Estate Agents, comments: “With agents predicting the housing shortage crisis to potentially worsen in 2015, the General Election will be a pivotal event for the housing market next year, with all three main parties pledging to build more homes should they be elected.
"We have already seen the current Government put policies in place in an attempt to tackle the problem, with the announcement of new garden city developments, as well as the reforms to stamp duty – another change our members believe will influence the market next year.
"While we do see these changes as a step in the right direction and believe that stamp duty reform will allow for greater supply in the market by encouraging more people to buy and sell, these changes are still not enough. The lack of capacity within the current market means that the gap between supply and demand probably won’t close for some time – we currently don’t have the resources to respond to the problem, and this is another issue that needs addressing.”
While NAEA members predict demand will rise next year, demand in November 2014 was down four per cent on October, from 380 house hunters registered per branch to 364 in November - the lowest levels recorded since March this year. A similar lull in supply also occurred, with the average number of properties available per branch down to 50 compared with 53 in October.
Following suit, the number of sales agreed per branch was also down, with agents reporting an average of eight sales per branch, compared to nine in October. There was some good news for buyers in November however. Despite decreases in supply, 82% of sales went for below the asking price.
Mark Hayward continues: “A lull in activity is typical for this time of year, and we’d usually expect it to pick back up again in January. However, with the recent Stamp Duty reforms announced at the start of December, we may see uplift in activity earlier than expected. The latest reforms have created an encouraging environment for people to buy and sell houses, and we’re looking forward to seeing the true impact these changes have on the market in the coming months.”
