UK housing supply falling by 15% per year
The UK housing supply has fallen by 15% annually in a trend that is set to continue, according to Haart estate agency. London in particular is believed to be suffering due to a scarcity of housing, with 20 times the number of buyers as there are available properties; such high levels of demand has driven a property price increase throughout the UK, although this may be eased by pledges from the Conservative Party to build 200,000 starter homes over the next five years to be sold at 80% the market value.
The imbalance between housing market supply and demand is set to increase further, with new data showing that the supply of UK homes has fallen 15 per cent annually, with housebuilders simply not building enough.

According to estate agent Haart, in London the problem is even more acute, with 20 buyers chasing each property for sale.

Despite this, Haart branches found that the prospect of rising interest rates pushed up demand in July by 4.1 per cent compared to last year and 5.3 per cent in the last month.

The number of new properties for sale has risen 3.1 per cent month-on-month, but declined by nearly a fifth in the last year.

Additionally, the level of competition has pushed up UK house prices 6.4 per cent annually to £217,072 on average. A seasonal dip of 0.3 per cent during July reflects the general trend for the summer market, Haart said, however there is an overall upwards trajectory in house prices.

House prices for first-time buyers are also rising steeply on an annual basis, up 7.7 per cent, with prices for first-time buyers up 0.8 per cent last month to an average of £167,794.

Compared with last July, the number of new first-time buyers is up 7.2 per cent but there has been a small monthly dip in registrations of 0.2 per cent, which Haart said was perhaps driven by the sharp rise in starter home house prices.

Paul Smith, chief executive of Haart, said that while registrations in the UK are up 5.3 per cent in the last month alone, supply has not kept apace. “Although we have seen instructions rise by 1.4 per cent in July, supply has actually fallen by 15 per cent annually and in London supply is down by a fifth compared to last year.

“Urgent action is needed to tackle the shortage of stock and allow people to move - a form of land relief to boost building activity is one way to do this.

“The new All-Party Parliamentary Group for Housing and Planning needs to proactively drive national action and make decisions which may not be universally popular in order to tackle the current crisis. If not, we will still be in the same situation come the next election.”

Earlier this month, the government launched two initiatives to boost housebuilding, rolling out a £26m fund for developers to build homes for first-time buyers and unlocking £10m for local authorities to prepare more ‘brownfield’ land for starter homes development.

Prior to the general election, the Conservative party pledged to build 200,000 starter homes over the course of the next parliament, reserved for first-time buyers under the age of 40 and sold at 20 per cent less than the market price.

ruth.gillbe@ft.com