UK property market in 'crisis' as sales hit lowest in 11 years
UK estate agents are reportedly saying that the British property market is reaching 'crisis point' today, as on average, the number of properties available per estate agent branch fell from 55 in July to 38 in August, marking a 31% decrease, according to the National Association for Estate Agents; this is the lowest number since January 2004. This is largely attributed to a lack of supply in the market, with Lloyds Bank saying that the supply shortage is due to a severe skills shortage in the UK.

Estate agents warned the British property market is reaching 'crisis point' today as figures showed the number of homes for sale fell by a nearly a third last month, taking the supply of housing to its tightest in more than a decade.

On average, the number of properties available per estate agent branch fell from 55 in July to 38 in August, marking a 31 per cent decrease, the National Association for Estate Agents said. This is the lowest number since January 2004.

The UK’s housing supply shortage has been highlighted as a major factor behind the ongoing rise in house prices and the affordability crisis afflicting prospective homebuyers.

Housing demand: While demand slowed down last month, it has been increasing steadily in recent years

The latest available official figures pointed to a 5.2 per cent annual increase in property prices to an average £282,000 in July.

Mark Hayward, managing director of the NAEA, said: ‘There simply aren't enough houses to match demand and we're reaching crisis point.

‘There are now 11 house hunters fighting after every available house which isn't sustainable.’

But plenty of credit exsist for those able to afford property: separate data today showed mortgage lending soared to a 14 per cent in the year to August.

While last month buyers’ demand actually fell 12 per cent, with a total of 408 house hunters compared to 462 in July, according to the NAEA, overall demand over the past years has been increasing steadily.

Looking at data over the past eleven years, supply of homes was as tight as it is now back in 2004, although back then competition among buyers was even stronger - with more than 550 buyers on the books in January 2004 compared to 408 last month.

In the run up to the financial crisis, with cheap credit overheating the housing market, the number of homes for sale increased and so did the number of buyers.

HOUSING DEMAND VS SUPPLY OVER THE PAST 11 YEARS Month/Year Number of house buyers on books Houses Available Jan-04 564 38 Aug-04 582 61 Aug-05 366 77 Aug-06 398 70 Aug-07 326 81 Aug-08 207 91 Aug-09 292 64 Aug-10 250 69 Aug-11 304 65 Aug-12 288 60 Aug-13 322 52 Aug-14 372 49 Aug-15 408 38 Source: NAEA

The gap between the two narrowed just after the crash, with just 207 buyers per branch in August 2008 and 91 homes available, as more people tried to sell off the homes they could no longer afford.

The NAEA, which represents more than 14,000 estate agents, also found that the proportion of first-time buyers getting on the ladder fell to the lowest level in a year.

Only one in five sales, or 20 per cent, was made to first-time buyers, compared to 23 per cent in July and 24 per cent in June this year, the NAEA said.

Homes supply: The number of houses available per estate agent branch has fallen to its lowest in 11 years

Hayward added: ‘First-time buyers are finding themselves being squeezed out of the competition, which of course means it's taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market.’

A separate study out today showed that on average people across the UK spend more than 40 per cent of their income to pay for rent, with this rising to half for those living in the capital.