An industry body has claimed there has been a severe widening of the divide between prospective home buyers registered at estate agents and the number of properties for sale in the UK.
The research claims that there are now a whopping 11 buyers for every property for sale.
Research by the National Association of Estate Agents (NAEA) suggests Estate Agent branches in the UK now have an average of 425 prospective buyers registered, a 10% uptick on the previous months figure. Meanwhile, supply is progressively becoming weaker with the number of properties available to buy falling to 38 properties per branch on average – the lowest figure since July 2016.
More than one in every 20 homes sold in January this year went for more than the initial asking price, leading to a spate of gazumptions and unhappy buyers.
DMZ recently reported on the new £1,000 ‘Reservation Fee’ Estate Agents are introducing for prospective buyers to lock-in their bid and fend off would-be gazumpers. In light of this research it would appear like that £1,000 could be money well spent.
Mark Hayward, Chief Executive of Propertymark, was frank about the statistics, “Competition is rife, with an average of 11 buyers chasing each property…the increase in the number of properties selling for more than asking price in January could be a result of heightened interest and the fact there is simply not enough housing to meet demand.”
“When the government issued their Housing White Paper at the start of February we stated how important it was for the industry to put forward robust solutions to really make a difference and it’s vital that building more affordable housing is at the very top of their agenda.”
Unfortunately, Propertymark does not provide a regional breakdown of the dataset. It also makes a numerous assumptions which in our experience are rarely true; their analysis totals the overall number of registrants to estate agent branches, averages them on a ‘per-branch’ level then assumes that every one of these registrants is actively looking for a property. As many of our DMZ’ers will know, that is rarely the case.
As fantastic as it would be for agents to assume that everyone on their books is actively conducting viewings and ready to offer, it’s simply not true. Extrapolating nationwide trends using this favourable data is misleading and potentially damaging for agents attempting to cultivate a lasting client relationship.
Similar to the RightMove House Price Index, which looks at asking price trends, Propertymark’s monthly index is not a true reflection of the market itself.
Both are interesting in their own right (DMZ reads both), but assumptions and asking prices are uncertain metrics to frame a decision or solid opinion on.
DealMakerz have had a number of requests to create a data service to complement our news service – updated information thats unbiased, interesting and insightful. Stay tuned…