As the supply of homes continues to drop, more buyers than ever before are willing to pay more than the asking price to secure their dream property, according to estate agents.
The supply of housing on the market has fallen for the sixth consecutive month from an average of 57 properties in September 2013 to 42 in March 2014, almost a 10 year low, the latest data from the National Association of Estate Agents (NAEA) shows. The result of this is increased competition, with buyers prepared to offer more than the listed market price to secure a property.
Some 19% of properties sold for more than the asking price in March, nearly three times the s7% recorded when the NAEA first collected this data in September 2013.With this willingness to pay more, NAEA member agents also reported an increase in the average number of sales agreed per branch, up from nine in February to 10 in March. It points out that although those looking to buy are serious purchasers, the average number of house hunters registering with NAEA agents dropped by 5% in March, down from an average of 331 house hunters in February to 313 in March.
As the buyers face the realities of dwindling housing stock, the percentage of first time buyers purchasing a property fell from a four year high of 29% in February to 25% in March, showing the first signs of a struggle amidst a fast moving housing market. Home owners were looking to upsize from their existing property in March with 50% of house hunters looking to do so, a marked increase from September 2013 when data was first collected showing only 32% of house hunters doing so.
‘The supply crisis continues to deepen, and the government must act now to offer house hunters hope in an increasingly congested market. Current conditions mean that in just a few months we’ve seen a large increase in the amount of people willing to offer over market price to secure homes,’ said Jan Hÿtch, president of National Association of Estate Agents.
‘Overall property sales may be up, but the proportion of first timers purchasing a property is down and with the significant changes that the Mortgage Market Review will bring just around the corner, we’ll be watching closely to see what kind of an impact is felt,’ she added.