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The coin has flipped: demand has outstripped supply

November 15, 2009Article by Ray Withers

UK South Sales News

Although the saying goes ‘never trust an estate agent,’ data cannot lie. And research shows that the market currently offers opportunity to whom is seeking it – and in this case we mean the home sellers. To qualify this: annually our Country offices puts for sale fewer and fewer properties, 32% less to be exact, but even so 54% more have been sold in comparison to last year.

Even if our sales volumes are still now at the thrilling 2007 volume, we aren’t far behind; only 16% down to be precise and not a bad revival since the drop of 60% the industry suffered last year. It can be argued that Hamptons is selling roughly at the same rate it did in 2005 and 2006 – both deemed fine years – and selling just about everything we are taking on.

We can’t claim to consult with Evan Davies but, in economics, one of its main principles is that if supply outperforms demand then prices are bound to rise as they surely are at present. As prices go on increasing we predict more properties for sale will be up in the market as owners improve their equities enough to continue climbing up the ladder. This will appease demand and brake on price growth.

UK South Lettings News

The country lettings area has had a rather prosperous August, with figures of 43% annual increases in new registrations, 51% in performed viewings and 21% new tenants entered in this past month. Much of the growing demand for lettings was caused by the substantial increase in activity in the sales market. The result is a new flow of sales completed that drives deposit-rich vendors into rented accommodation, from where they are able to move fairly quick once a spot-on buying opportunity shows up.

Some examples of this intense competition in the lettings market involve 13 viewings in just 3 hours at a 3-bedroom Hertfordshire house, 3 bids above asking price for a spacious family house in the Home Counties and a huge number of accurately priced properties letting at the first viewing across the whole of Hamptons’ network.

As sales continue to thrive, the amount of houses for rent is significantly below the amount needed to appease the present demand and this, consequently, is causing rental prices to signal recovery. With letting stock levels down, yields steady and demand for quality housing stock at a record high, now seems to be the ideal time for reputable investors to mull over increasing portfolio sizes once more.

Many thanks for research carried out by Hamptons

Written by: Christopher Chadd

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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