Supply continues to fall behind demand, with a 0.5% drop in stock leaving 15 buyers after every property for sale.

Summary:

• Supply of new property in the UK has declined by 0.5% since December last year
• There are now 15 buyers chasing every property on the market, an increase from 12 at the end of 2015
• The average cost of a first-time buyer property has reached £175,000, a record high

Demand for UK property continues to outstrip supply in 2016.

The number of new buyers has risen by 35% in the last year and increased 4.9% on the month, with first-time buyer house prices hitting a record high.

The supply of new homes has declined 0.5% since December 2015, with the growing disparity between supply and demand meaning there is more than 15 buyers chasing every property on the market, up from 12 in December.

Viewings have increased 7.4% month-on-month as the end of the seasonal dip welcomes vigour back to the property market. However, over the same time period sales have shrunk by 14.7%, reportedly due to a lack of specialists such as surveyors and lawyers to cope effectively with the renewed levels of activity.

Paul Smith, CEO of independent estate agents, haart, said: “The property market in the new year has got off to a flying start with a surge in buyer registrations and new property instructions. The number of new homes coming on the market is up by a healthy 8% compared to a year ago but demand has surged by 35% over the same time period.”

The number of first-time buyers entering the market surged 26.1% annually in January and rose 4.8% on the month. First-time buyer house prices rose 6.8% annually and 2.3% on the month to reach £174,804, a record high.

With demand looking to continue, yields within the private rented sector (PRS) are expected to increase year-on-year. By 2025, there will be 7.2 million households within the PRS, an addition 1.8 million to the current figure – leaving more people renting privately than owning with a mortgage.

Source: Select Property