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Property demand out-stripping supply, says NAEA

Property demand is exceeding supply across the UK, according to research by the National Association of Estate Agents.

According to NAEA data, estate agents are registering five house hunters to every available property, yet the supply of properties has fallen.

The monthly market survey found that the average branch had 287 house hunters on its books in October, down slightly from 294 September.

This represented per branch 57 properties on its books in October, compared to 62 in September.

NAEA says this demand is pushing house prices up as the gap between asking and selling prices fell from 10.9 per cent in September to 8.8 per cent in October.

NAEA president Gary Smith says: “There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the UK economy in general.

“Many buyers are at the very beginning of the house buying process and this is creating a lack of properties in the short term. It is now up to the Government and the banks to do more to keep the momentum of market recovery going.”

Smith says a good place to start is for the Government to extend the stamp duty holiday, which is scheduled to end in December.

He says: “The danger is that this short-sighted policy could precipitate an unwelcome pause in the housing market at the start of the new year. We can only hope that common sense will prevail and that the Government will raise the lowest level at which stamp duty will apply to £175,000 for an indefinite period.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. If demand is outstripping supply, why would the government want to extend the stamp duty holiday???

    The main reason for the lack of supply is the record low interest rates, with so many people sat on record low SVRs and Trackers. When rates start to rise significantly towards the end of 2010, you will see a swing the other way and prices will no doubt start dropping again.

    I am confident there will be another house price shock within the next 3 years. The government and central bankers know this and are simply buying time to help repair the banks and rebuild their balance sheets so that they are not so vulnerable to collapse next time.

    The excess credit of the past 5-10 years (excluding past 2 years) has simply been passed from private to public sector.

    Now the government debt problem will be a persistent drag on our economy for a good 10-20 years. I await the tax rises in 2010 and beyond before moving abroad, perhaps somewhere in better economic shape, such as Zimbabwe!!

  2. Body whose members would benefit from the market moving upwards talks up the market…hmm

    Stamp duty, like NICs and VAT are all just ways of hiding the true tax take that has been killing the productive element of the UK for years in preference of those who do little or nothing that generates value but, then again, perhaps the financial services industry shouldn’t be too critical of that given its record on product and fund charges…

  3. Neil F Liversidge 6th November 2009 at 5:07 pm

    Maybe there are five house-hunters after one property if the ‘one’ property in question is occupied by an 18-year old page 3 girl who has just won the National Lottery, whose father owns a private brewery and who has just placed a personal ad reading “Gorgeous filthy-rich nymphomaniac desperately seeking the love of her life (looks not important).” Nice one guys for trying to talk up the housing market, but we’ve all heard ‘Estate Agent Speak’ before. Pity you couldn’t illustrate the story with one of those special photographs you take. (You know the ones I mean – the sort that make the postage-stamp sized lawn look like Lords’ Cricket Ground.)

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