Demand from buyers in UK falls to two year low

Demand for housing in the UK is at its lowest level in two years with the number of house hunters making enquiries down by a fifth in April, new research shows. Estate agents also reported that the number of sales made to first time buyers fell in April. The April Housing Market report from the National Association of Estate Agents (NAEA) shows there were 325 house hunters registered per member branch on average last month. This was the lowest number recorded since March 2014, when there were 313 house buyers recorded at each estate agent branch. This means demand has decreased by 22% from 417 in March. Last month, the supply of houses available for buyers also decreased by 35% from 54 properties available in March to 35 in April. Some 26% of the total sales made in April were to first time buyers, a decrease of 2% compared to March. However, some 33% of estate agents expect sales to this group to increase following the buy to let stamp duty changes as buy to let landlords exit the market, potentially freeing up properties for first time buyers. According to propertywire, “The monthly research also found that 24% of estate agents expect house prices to decrease and a further 23% expect demand to decrease if Britain votes to leave the European Union in the referendum on 23 June.” Indeed, a recent Brexit report from the NAEA and that Association of Residential Letting Agents (ARLA) revealed that by 2018, a Brexit would reduce the average UK house price by £2,300 to £300,900. However, if Britain remains in the EU, the average UK home could cost £303,000 by 2018. ‘It’s no surprise that demand dropped significantly in April. Some 80% of agents saw an increase in purchasers trying to beat the buy to let stamp duty changes before the 01 April deadline, so we expected to see a slow down immediately following the deadline,’ said NEA managing director Mark Hayward. ‘Whilst the number of house hunters registered per branch dropped in April, the supply of available housing to buy also fell quite sharply, so supply and demand are still moving in the opposite direction, rather than balancing out,’ he explained. ‘Additionally, the upcoming EU Referendum means we’ve entered a period of uncertainty, as buyers put off their hunt in anticipation of the result, and what might happen to prices as a result,’ he added.