House Purchase demand outstrips supply, reports London Mortgage Broker, London Mortgage Advice Friday, 6th November 2009

For each available property in the month of October, an average of five house hunters were registered on estate agent's books.

According to data from the National Association of Estate Agents (NAEA), this good level of interest failed to convert to sales, with agents selling an average of 7.7 properties each, compared to 8.5 in September.

The actual number of homebuyers also went down to 287, falling from 294 in September. But according to data from the National Association of Estate Agents (NAEA), that figure is considerably more promising than the 196 househunters registered in the same month last year.

Estate agents reported that the average number of properties available for sale per branch dropped from 62 in September to 57 in October.However, The NAEA attributes the apparent rise in demand per property to a fall in the number of homes for sale.

Halifax reported this week that average property values rose 1.2% last month, boosting the average cost of a home to £165,500. And it is the lack of supply that has underpinned the house price increases we have witnessed since the summer.

“There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the British economy in general.” Gary Smith, president of the NAEA.

First-time buyers accounted for 22% of sales agreed during October, which is down from 26% the previous month, but more than double the 10% reported in October last year.

The lack of property available means thats that even those who can obtain the necessary finance may not find a suitable property to buy. Homes for families are especially in short supply and prices are being sustained because of the demand for each property that comes onto the market. Until more properties become available and finance is more readily accessible to those with small deposits, the number of transactions will remain poor