The number of homes on the market has jumped by a quarter within a month, but sellers are still significantly outweighed by the number of buyers chasing properties.
The National Association of Estate Agents (NAEA) found that available housing increased by 25 per cent from an average of 44 properties per estate agency branch in June to 55 in July. This was the highest in almost two years.
At the same time the number of home hunters per branch rose from 439 to 462, the most in 11 years. This meant that on average there were more than eight prospective buyers chasing each available property, which threatens to push up prices.
Despite the increase in supply, the number of sales remained static, with only nine per branch, indicating that although housing stock is starting to increase, it remains a struggle to complete a purchase.
The research also showed that the number of sales made to first-time buyers continued to fall last month, as rising house prices further stretch affordability. First-time buyers now account for only 23 per cent of sales, down from 29 per cent in May.
Advertisement
“The truth of the matter is there simply aren’t enough houses to meet growing demand, and until we see more physical bricks and mortar, there may be no hope of solving the housing crisis,” Mark Hayward, the association’s managing director, said.
“It’s also alarming that the number of sales being made to first-time buyers is steadily falling; with reports of house prices increasing and expectations of rising in the future, first-time buyers will continue to be pushed out of the market.”
The figures came after BNP Paribas Real Estate predicted yesterday that prices would rise by nearly a third over the next four years to £260,000, buoyed by robust economic growth and the chronic undersupply of new houses.
Separate figures from LMS, a remortgage provider, showed that the number of remortgage loans increased by 47 per cent, from 31,600 in June to 46,423 last month.
This was 89 per cent higher than the number recorded in July last year and the highest since 2008.
Advertisement
Andy Knee, the managing director of LMS, said: “We are confident these levels will be maintained with a steady stream of customers for the remainder of the year.”
The rise was driven by homeowners rushing to lock in deals before interest rates rise from the record low of 0.5 per cent.
The general consensus is that this will not happen until next year, but Mark Carney, the governor of the Bank of England, has signalled that it could happen by the end of this year.