UK residential market set to see widening gap in demand and supply in 2015

Taylor Scott International News

Next year is set to see a widening gap between demand and supply as not enough new homes are being built, according to members of the National Association of Estate Agents (NAEA). Almost half of NAEA members predict a rise in demand for housing in 2015, however demand was down by 4% in November, the association’s latest report shows. It also says that interest rate rises, changes to stamp duty, and the general election, will cause the biggest impact to the residential property market in 2015. Despite recent government announcements to build more new homes, some 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. The association said it is worrying that 21% think levels of stock will decrease next year and 33% expect them to stay the same, which, combined with a rise in demand, will mean a heightened housing shortage. However, 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 at 34%, changes to stamp duty at 32% and the general election at 32%. ‘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,’ said Mark Hayward, NAEA managing director. ‘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,’ he explained. ‘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,’ he added. The report shows that demand in November 2014 was down 4% 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… Continue reading →

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