Hype about a housing market boom is misplaced, because analysts are ignoring regional differences in vendor behaviour.
Doug Shephard, of the property search engine Home, said that the overall current volume of vendors entering the market, at around 100,000 per month across the UK, is less than half of what it was during the property year boom of 2007.
However, while supply is down 19% and asking prices up 10.5% year on year in London, in the north-east, supply is up 16% with asking prices stagnant.
Shephard said that home owners in areas where prices are growing are reluctant to sell. Concerns about the lack of suitable properties to buy are also discouraging many would-be vendors.
However, Shephard said that the increase in the number of vendors in poorly performing northern regions was an “alarming trend”, creating a buyers’ market and putting downward pressure on prices.
Shephard said: “These regional supply dynamics suggest that the bipolar nature of the UK property market is only going to get worse. Starved of new and resale stock, pricing in the London and south-east property markets looks set to go ballistic.
“Prices in the capital are already increasing too fast and further restrictions in supply can only serve to make matters worse. Meanwhile, increases in supply in the sluggish northern markets can only exacerbate their problems of slow sales and price stagnation.”
Separately, Sequence said today that buyer demand is up 58% in London compared with a year ago. The agents said that new buyer registrations are rising over three times quicker than supply.