UK autumn property market buzzing as demand outstrips supply

The autumn property market in the UK buzzing as the residential recovery gets underway with new first time buyers up 70% which is helping to boost sales by 16% annually, according to a new report.

The analysis from haart estate agents, which has 100 branches, says that demand is so high that there is a shortage of suitable properties which has resulted in sales being down 2.4% on the month.

It is even worse in London where the number of first time buyers is up 87.3% annually, but new properties for sale are down 6.6% annually.

‘The recovery of the property market across the UK is persisting into the autumn with new buyers continuing to enter the market up 32% annually with first time buyers up 69.5%. Property prices are up 1.5% on the month in September since the summer,’ explained Paul Smith, chief executive officer of haart.

‘The housing market is a hive of activity and we have already predicted that transactions will rise 10 to 15% over the next 12 months. Our most recent data shows that this is already historically true over the year ending September 2013,’ he added.

He also pointed out that the government’s advanced launch of the second phase of Help to Buy will boost demand for homes by reducing a required deposit to 5%. ‘This is a huge help to first time buyers who are unable to step onto the property ladder, but the influx of demand will also encourage second steppers to put their home on the market as they will be further buoyed by the 5% deposit where they lack equity to move up. This extra feed of property will ease the current log jam of supply,’ said Smith.

Meanwhile, separate research shows that the number of new homes sold in the UK using part exchange has increased by 11% over the last year due to more second time home owners using this method to buy a bigger property.

Part exchange provider Move with Us has found that the method where a home owner trades in their existing property for a new home through a house builder has grown in popularity.

It says that part exchange is typically quicker than a traditional home move in a market where the average property sale takes 104 days on average. The certainty of part exchange has proved popular with second time buyers as an alternative to selling their property on the open market.
With part exchange the builder will buy the property and sell it separately, not only providing a guaranteed buyer but removing the home owner from the delays caused by being in a chain.

‘Part exchange is an attractive option for many homebuyers, allowing them to sell their old property at a true and fair market value in the shortest time possible and enabling them to get a brand new property in return. One of the main benefits of PX has to be the certainty provided by having no chains at either end of the sale. Due to these factors house builders are building more family style homes and creating a new trend,’ said Robin King, director at Move with Us.

‘The significant growth of construction activity coupled together with government incentives such as the NewBuy scheme has also made new build properties much more accessible at a time when mortgage approval rates have been low so it is no real surprise that part exchange has increased in popularity as more so called second steppers look to move up the property ladder,’ he explained.