House price 'bubble' as buyers outnumber sellers five to one

Published 06th Nov 2009

Homebuyers are outnumbering sellers by a ratio of five to one, creating a price bubble, it is claimed today.

The figures come after further signs of a mortgage price war among banks and building societies.

The National Association of Estate Agents said the average estate agent branch had 287 house hunters on its books in October compared with only 57 properties for sale.

'This demand is pushing house prices up,' it said.

The gap between asking and selling prices has fallen from
10.9 per cent to 8.8 per cent in a month.

The stabilisation of the housing market has been helped by the return of some first time buyers and the Government's stamp duty holiday.

It lifted the threshold at which the duty applies from £125,000 to £175,000 a year ago, but this measure will be dropped next month.

Gary Smith, the association's president, said: '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 UK economy in general.'

He urged the Government and the banks 'to do more to keep the momentum of market recovery going', including extending the stamp duty holiday 'for an indefinite period'.

Yesterday, the Nationwide, the country's biggest building society, announced that it is reducing rates on 19 home loan deals by up to 0.31 per cent. This is the latest in a series of cuts by the society.

Northern Rock yesterday cut its mortgage rates for the fourth time in just over a month. It is reducing rates on 13 of its fixed rate and tracker deals by up to 0.5 per cent.

Abbey cut the cost of its fixed rate and tracker mortgages by up to 0.3 per cent.

Source: ' Daily Mail '

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