Rightmove has revealed that estate agents have 8% fewer new instructions than this time last year, as a lack of supply is causing possible vendors to stay put.
Director and Housing Market Analyst at Rightmove, Miles Shipside, says there is a “vicious cycle of not enough property on the market to meet demand, increasing prices and a reluctance among homeowners to come to market if they think the prospects of finding and funding their next move are severely compromised.”
Rightmove’s report states three reasons that prospective vendors are not putting their homes on the market.
Having studied homeowners who were seriously considering selling their home, Rightmove found that they either cannot find anywhere they want to buy, property is too expensive or the cost of moving is too high.
Shipside adds: “[The prospective vendors] could be helping to get the country’s limited property stock circulating, but they have concerns about coming to market, deepening the supply shortages affecting many areas.”1
The report also claims that the difference between supply and demand has caused the strongest August price performance since 2007.
Between July and August, the price of new homes on the market dropped by only 0.8%, breaking the eight-year trend of huge summer holiday price decreases.
The national average asking price for new properties on the market is £292,284, from £294,542 in July. However, it is still 6.4% higher than August 2014’s figure.
The typical estate agent in the UK has 65 homes for sale on their books, with the average time on the market standing at 65 days.
Regionally, asking prices have generally fallen monthly in the south and risen in the north.
Between July and August, prices declined by 1.2% in the East of England and the South East, 1.3% in Greater London and 1.4% in the East Midlands and the South West.
In the West Midlands, prices increased by 0.1%, by 0.2% in Wales, 0.5% in the North West and 1.2% in the North East.
However, many agents believe homeowners wish to sell, even if they are held back by Rightmove’s suggested factors.
Director of Manning Stainton in Leeds, Harrogate, Wetherby and Wakefield, states: “In July, the number of appraisals that we carried out was 21% higher than usual, so there’s definitely a sense that there are a greater number of people who are considering selling.
“With regards to stock level, it’s not that there’s no stock, it’s just that when good property does come on, the demand is so high that it’s selling much more quickly than usual.”1
1 http://www.propertyindustryeye.com/rightmove-reveals-extent-of-drop-in-new-instructions/