Housing demand and supply mis-match to continue: NAEA

Housing demand and supply mis-match to continue: NAEA

Demand for property will increase next year, while members of the National Association of Estate Agents were split on whether the same could be said for housing supply.

The organisation’s latest report found that 46 per cent of NAEA agents believe housing demand will increase.

One in five agents - 21 per cent - think levels of stock will decrease next year whereas a third expect them to stay the same. The industry body said that this, combined with a rise in demand, will mean a heightened housing shortage.

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In contrast, a third of agents were much more optimistic, stating that housing supply would increase next year, although still not enough to meet the rising level of demand.

In terms of what would have the greatest impact on the housing market next year, 34 per cent of member agents suggested the potential base rate rise, whilst 32 per cent predicted changes to stamp duty would have the biggest impact and 32 per cent thought it would be May’s general election.

Mark Hayward, managing director of the NAEA, said: “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.

“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.”

Mr Hayward stated that these changes are a step in the right direction and stamp duty reform will allow for greater supply in the market by encouraging more people to buy and sell, it will still not be enough to solve the problem.

“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.”

Demand in November was actually down four per cent on October, from 380 house hunters registered per branch to 364 last month - the lowest levels recorded since March this year.

Mr Hayward added: “A lull in activity is typical for this time of year, and we’d usually expect it to pick back up again in January.

“However, with the recent stamp duty reforms announced at the start of December, we may see uplift in activity earlier than expected. The latest reforms have created an encouraging environment for people to buy and sell houses, and we’re looking forward to seeing the true impact these changes have on the market in the coming months.”