During April demand for housing dropped to the lowest level recorded since March 2014, according to the National Association of Estate Agents (NAEA).
The organisation's latest Housing Market Report shows that there were 325 house hunters registered with the average estate agency branch, down from 417 in March.
Last month's figure is the lowest level of demand recorded by the NAEA for more than two years – when agents had an average of 313 prospective buyers registered per branch.
The report shows that property supply also dropped by 35% last month, from an average of 54 properties available per branch in March to 35 in April.
Just over a quarter of total sales made in April were to first-time buyers, down from 28% in March. However, a third of agents surveyed said they expect sales to first-timers to increase in the next few months.
“It’s no surprise that demand dropped significantly in April," says Mark Hayward, managing director of the NAEA. "Eight in ten agents saw an increase in purchasers trying to beat the stamp duty changes before the deadline, so we expected to see a slow-down immediately following the deadline."
"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 says.
Last week the NAEA and its sister organisation ARLA released a 23 page report on the upcoming EU referendum and how it could affect the property market.
The NAEA says that 24% of the agents it surveyed expect house prices to decrease if the UK leaves the EU, while 23% expect demand to decrease.
"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,” says Hayward.
Earlier this week, estate agency chain haart reported a 46% drop in buyer registrations during April.
The firm's chief executive, Paul Smith, said sellers need to be more 'realistic' in the asking prices they're setting or they will struggle to sell.
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I agree that property supply has dropped, but demand?? Absolutely not!! Not in our area of Birmingham, which is still affordable. Even apartments are moving quite nicely.
what for the ripple effect Terence! Supply has been at historic levels in London and the South East and the ripple usually always travels Northwards, make hay whilst the sun shines, as I feel we may be in for a bumpyish road whatever the result of the forthcoming ballot. But as always in a tougher market the cream of High Street agents will rise to the top, what will be interesting is how the online agents will cope when the market appears a little tougher and how they will combat that and move with the times.
I agree Daniel, and I cannot see the supply increasing until after the Referendum. However, as property is so affordable up here in not-so-sunny Birmingham, we are getting a LOT of buyers moving up from London and not enough properties to sell them.
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