The number of homes on the market fell to a two-and-a-half-year low during January as sales picked up despite the winter weather, new research shows.
The average estate agent had only 55 properties on their books during the month, down from 59 in December and the lowest figure since July 2007, according to the National Association of Estate Agents.
The group attributed the dwindling stock of homes on the market to a pick-up in the number of sales agreed during the month, with this rising to 5.7 sales per branch from 4.9 in December.
But the ongoing shortage of homes, combined with a further rise in the number of househunters registering with estate agents, is likely to put renewed upward pressure on house prices.
Gary Smith, president of the NAEA, said: “Our figures suggest that concerns expressed about the prospects for the market in 2010 may prove unfounded.
“This appears to be confirmed by the increased level of sales which, given the awful weather conditions, is quite amazing.
“The dwindling housing stock on our members’ books reflected the increase in sales month on month, but this is a worrying trend that if continued will result in further upward pressure on prices.”
The group said it expected there to be more house price rises in the months ahead due to the current shortage of supply, but this should “peter out naturally” as more homes come on to the market.
It added that fears that demand for property may slump following the end of the Government’s stamp duty holiday on homes costing up to £175,000 appeared not to have materialised.
Instead, the number of potential buyers registered rose to 291 per estate agent from 251 in December.
There was also a rise in the proportion of properties being bought by first-time buyers, with this rising to 23% from 19%, suggesting a recent improvement in the number of mortgages available for people with only small deposits may be feeding through into sales.
The NAEA’s figures contrast with ones reported by the Royal Institution of Chartered Surveyors which showed a dip in activity due to the freezing weather in January.
The group recorded its first drop in inquiries from potential buyers for 14 months during January, while the number of new sellers fell for the first time in seven months, and there was also a drop in the level of sales agreed.
Meanwhile, the Association of Residential Letting Agents warned that a significant number of tenants were continuing to struggle to meet their rent payments.
The group said 55% of its members had reported a rise in the number of people who were in rent arrears, although this was slightly down on the 63% who saw an increase in those struggling during the previous quarter.
Ian Potter, operations manager of ARLA, said: “Unemployment has been the primary factor behind rental arrears throughout the recession.
“If the jobless total rises in 2010 it is inevitable that the number of tenants forced to default on their rent will also increase.”