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Demand For Uk Property At Its Highest For Almost A Year

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http://www.propertywire.com/news/europe/uk-property-market-demand-2015063010685.html

Demand for property in May in the UK was at its highest level since September 2014 at a time when supply has seen a large fall year on year, according to estate agents.

There were 383 house hunters registered on average per branch compared to 344 the previous month, according to the latest monthly report from the National Association of Estate Agents (NAEA).

The report also records the highest year on year level of house buyers since May 2005 when 386 house hunters were recorded per branch.

The data shows that the supply of housing has increased marginally from last month, with 46 houses up for sale per NAEA member branch in May, compared to 43 last month. And whilst demand for property is at similarly high levels to May 2005, supply has almost halved year on year over the 10 years, when 81 properties were available to buy.

As supply and demand levels have risen, the number of sales per member branch has also risen slightly from last month. Some nine sales were agreed in May, compared to eight in April. Sales to first time buyers increased in May, jumping from 26% in April to 29% of sales in May.

‘There’s been a significant jump in the number of house hunters searching for properties this month, no doubt because the uncertainty of the market following the election has worn off and confidence has returned,’ said Mark Hayward, NAEA managing director.

‘However, supply does not meet the rise in demand, and as consumer confidence grows we will continue to see a widening of the property gap. The housing shortage will not be solved any time soon, so as pressure mounts we will no doubt see increases in house prices, making it harder for those stepping on or up the ladder,’ he added.

That sounds ominous. Reading through though, a number of oddities and questions arise in my mind...
It's been seven months since September 2014, one month more than half a year - since when is that "almost a year"? Pinickety perhaps, but an exaggerating headline nonetheless.
Then the question arises, the article doesn't compare demand in May to September 2014, so how does it compare? I went digging - 383 house hunters per branch in May 2015, and 406 in September 2014. I checked the other months too. They aren't lying, but they neglect to mention that house hunters are down 6% compared to September.
The article also talks about how much supply has fallen since May 2005, but aren't we comparing to September 2014? I went digging again - 46 houses for sale per branch in May 2015, 51 in September 2014. So yes, supply has fallen over that period, by 10%.
So there is a fall in demand and a fall in supply since September 2014, but the fall in supply is greater than the fall in demand.
Again, they aren't lying, there's clearly been an increase in the number of house hunters per house for sale - 7.96 in September 2014 and 8.33 in May 2015 - a 4.5% increase. That may be a significant increase, but it doesn't seem to tally with the overall theme of the article: "supply has seen a large fall", "a significant jump in the number of house hunters", "we will continue to see a widening of the property gap", "we will no doubt see increases in house prices".
It seems to me that this measure of the number of house hunters per house for sale is the only sensible way of measuring the supply/demand equation to verify if what the article is saying is factually correct - it's all very well picking a date since which demand has not been so high, and a date since which supply has halved, but unless you're comparing the two numbers and seeing the trend, they can't tell us anything.
So I went digging further, and pulled out the two stats for every month going back to July 2013. The reports actually go back to February 2013, but June 2013 is missing so July is as far back as I can go.
Here is a chart of the number of house hunters per house for sale for that dataset:
naea_supply_demand.gif
The huge jump from 4.91 in July 2013 to 8.71 in April 2014 is evident, an increase of 44%. But then there has actually been only one month since where that number has been surpassed - 8.84 in October 2014.
The trend looks to have been broadly flat for more than a year now. I see no "widening of the property gap" whatsoever, so apart from obvious question of whether these statistics can give us any insight into what prices are going to do going forwards, I say that they in no way tell us that we will no doubt see increases in house prices.
Thoughts?

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But only 8/9 sales a month per agent. Would need to do some fag packet accounting. So say1.5% of sale cost of say 170k house x 9 x net profit margin (guess 10%). Presumably lots of Ea's moved into lettings ?

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It is a frenzy; Sold STC, rubbish stock shifting that previously stuck for ages.

Other housing forum I was just reading today; a post of today or yesterday.

Nothing screams market top louder than the middle class jumping in at peak prices. The same thing happened in 1989 and 2007.

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But only 8/9 sales a month per agent. Would need to do some fag packet accounting. So say1.5% of sale cost of say 170k house x 9 x net profit margin (guess 10%). Presumably lots of Ea's moved into lettings ?

That's a lot.

LR sold data for the last few months, divided by a guesstimate of the number of EAs employed in my local town, and I get a figure of 0.3 sales/EA.

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I assume house hunters would be represented by the number of people who have registered with an agent. A number of issues with this:

1. People register with multiple agents - so it is impossible to deduce the "real" number of househunters.

2. Just because you're registered doesn't mean you're really "in the market".

3. There is no evidence presented that the "househunters" have the ability to proceed with a purchase at the current price levels. You're not a real buyer unless youve got access to the cash....

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I assume house hunters would be represented by the number of people who have registered with an agent. A number of issues with this:

1. People register with multiple agents - so it is impossible to deduce the "real" number of househunters.

2. Just because you're registered doesn't mean you're really "in the market".

3. There is no evidence presented that the "househunters" have the ability to proceed with a purchase at the current price levels. You're not a real buyer unless youve got access to the cash....

Yes, and furthermore, how many of those registered are de-registered in a timely fashion when they are no longer in the market? With an average of 383 per branch, each branch would have to contact more than 10 registered house hunters per day to confirm whether they are still looking to buy or not.

And if the answer is "well, I'm going to sit it out for 6 months, save some more, see where I am then", would they be de-registered?

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I "registered" with a number of estate agents quite a few years ago, never visited since. I wonder if I am still "registered" as a househunter, I certainly haven't bought at these government-sponsored vasted inflated prices.

How is anyone "de-registered"?!

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Demand For Uk Property At Its Highest For Almost A Year

Started by Digsby, Today, 12:29 AM
What!!!......from people without a property or people that already have one........my last road turned into landlordville.....I watch slowly as more and more buyers are buying to rent not buying to live in.......the system, and social mobility is well and truly bust.....begining of the end.....sitting ducks. ;)
Edited by winkie

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The NAEA have a new report out here.

The headline is: "HOUSING DEMAND AT ELEVEN YEAR HIGH".

Note the fall in FTBers: "the number of sales made to first time buyers declined in June, with the group accounting for just 24% of sales, compared to 29% in May"

I've pumped the new figures into the chart in my OP, and it now looks like this:

naea_demand.png

I wonder what it will look like post budget...

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NR2 still hot

Everything half decent sold within a week and worn out houses in desired locations going for over 100k a bedroom > needing renovation.

Outside this area overpriced but not selling as fast.

Hoping the London falls ripple out to here as its a bit of a joke to be honest as I do not even like the houses let alone buy them for 400k +

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I assume house hunters would be represented by the number of people who have registered with an agent. A number of issues with this:

1. People register with multiple agents - so it is impossible to deduce the "real" number of househunters.

2. Just because you're registered doesn't mean you're really "in the market".

3. There is no evidence presented that the "househunters" have the ability to proceed with a purchase at the current price levels. You're not a real buyer unless youve got access to the cash....

Exactly. They just take you're details as a matter of formality...you are 'registered'

My late granny often spent her free time just looking round nice houses for sale...never had much intention of buying...just something to do...maybe a little nosy!

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I "registered" with a number of estate agents quite a few years ago, never visited since. I wonder if I am still "registered" as a househunter, I certainly haven't bought at these government-sponsored vasted inflated prices.

How is anyone "de-registered"?!

As a matter of interest for those reading this thread - could you perhaps call up these EA's and just ask if you are still registered with them ? I imagine you will be - but confirmation would be good to confirm these numbers are based on very little.

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There could be various explanations for the jump, one is that demand hiked massively in June, another could be something like this. The article was published on July 3rd, but for all know, 1,300 new branches could have become members in June. There's just no way of knowing, although cross referencing with mortgage application/approval data might prove fruitful.

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I really do not see how anyone can measure demand.

I think that 'Demand' is just EA's trying to talk the market up.

My village has 3 EAs, who on earth wishing to buy here would only register with one agent?

So, if you collected the numbers from all 3 you would then have to divide by 3.

However, many would be purchasers are not stuck to just one area and register with agents in other places.

The whole thing becomes a nonsense

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I really do not see how anyone can measure demand.

I think that 'Demand' is just EA's trying to talk the market up.

My village has 3 EAs, who on earth wishing to buy here would only register with one agent?

So, if you collected the numbers from all 3 you would then have to divide by 3.

However, many would be purchasers are not stuck to just one area and register with agents in other places.

The whole thing becomes a nonsense

Yeah, I think we've pretty much covered the flaws in the data. But accepting that there's little perfect data we have on the market, especially anything nearing real-time, then I think it is worthwhile considering what we do have and what it might mean, while bearing it's flaws in mind.

The flaw that a purchaser is likely to be registered with more than one agent, was still true in May, and so that in itself does not explain the rise, and thus the rise cannot be written off as not being indicative of a trend of increasing demand.

It's not accurate, it may well not actually reflect a true rise in demand, but the same metrics gave a very different result last month which could tell us something. The question of what that something might be is of enough interest to me to think it worth posting (plus, my original post was to demonstrate that the NAEA's analysis that the supply/demand gap was growing was not borne by their own data, whereas the July report's data does - inherently flawed as it may be).

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I still receive emails from an EA for an area we were looking to buy in some five years ago. We bought in a totally different area 18 months ago.

Cheers - thought as much.

So "registered" seekers are just going to increase constantly ?

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