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Supply and demand imbalance holding market back: research

Supply and demand imbalance holding market back: research

The vast majority of property professionals believe the housing market is being held back due to a shortgage of homes, mortgage availability and lack of new-builds.

Conveyancing firm MyHomemove carried out the research last month among 159 estate agents, mortgage lenders, brokers and housebuilders, and found that 90 per cent believe the market is being held back, with 47 per cent of these citing a shortage of homes being the main problem.

A quarter of respondents blamed a lack of mortgage availability, while 16 per cent said that a lack of new build properties were holding back the market.

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Earlier in May, Halifax’s monthly house price index showed that a lack of supply was continuing to force house prices up, with the average property price now just shy of £200,000 growing by 8.5 per cent in the 12 months to April.

Myhomemove’s research suggested that improved confidence from sellers in the wake of the decisive election result could ensure increased stability and predictability that will deliver more confidence, pushing the number of house sales up.

While Rightmove’s monthly house price index showed a May drop due to pre-election jitters, it backed up this trend, pointing out that new seller numbers jumped 17 per cent after the 2010 general election result and there might be an even bigger surge now, with the removal of the ‘mansion tax’ threat stimulating the prime market.

Those surveyed by Myhomemove broadly supported the Conservatives’ manifesto housing policies, with 80 per cent backing an extension of the Help-to-Buy scheme for new build purchases to 2020, while 65 per cent supported the starter homes scheme.

But the property professionals were divided on one of the other main housing policies put forward: reducing inheritance tax on the family home; 42 per cent said they support the policy, while 38 per cent opposed it.

Some 38 per cent of respondents also said that a target of building 200,000 new homes was achievable, while 43 per cent said that a Right-to-Buy scheme for housing association tenants was realistic, with 27 per cent not sure.

Doug Crawford, chief executive of Myhomemove, commented that the main housing policies outlined by the new government in its manifesto are, for the most part, popular within the industry.

“The question now is whether the government can deliver on its promises and how quickly it can do so. Some policies, like extending Help-to-Buy, are far simpler to deliver than others, like the proposed Right-to-Build scheme.”

peter.walker@ft.com