Potential buyers are flooding back to the market with several househunters chasing every property for sale during May research has suggested.
Estate agents had an average of 299 househunters registered with them during May, the highest level since September 2007 when the market downturn began, according to the National Associations of Estate Agents (NAEA).
The pick up in interest from potential buyers continued to translate into sales during the month, with estate agents selling an average of 10.4 homes each, the highest level since October 2007 and the fifth consecutive monthly rise.
Successful first time buyers nearly double
In a further positive sign, the proportion of homes sold to first-time buyers soared to 43%, nearly double the one in four homes that were sold to this group during the four months to April, and a level last seen in September 2001.
First-time buyers are often described as being the lifeblood of the property market, as a shortage of people buying homes at the bottom of the housing ladder makes it difficult for other buyers to trade up.
The NAEA welcomed the surge in first-time buyer numbers, saying the figures showed this group was returning to the market in force and suggested that people thought now was the right time to buy, before house prices begin to bounce back.
Demand for homes outstrips supply
Around 49% of people think house prices will increase in the coming 12 months, while 12% think they will stay the same. Overall, people expect the average cost of a home to edge up by 1.4% in the next year, with only 27% of those questioned predicting further price falls, down from 65% in March.
But the pick-up in interest from potential buyers is not being matched by homes coming on to the market, with the NAEA reporting its members had an average of just 69 homes on their books in May, down from 76 in April. Several indexes, including those from Halifax and Nationwide, reported house price rises during April and May.
Speculators suggest that the shortage of homes for sale, combined with rising interest from potential buyers, may be supporting prices, although others have warned that the shortage of supply could derail the recovery. But the NAEA said the vast majority of buyers also had a property to sell, which they had not yet put on the market, and in time, this would help to reduce the shortfall.
Gary Smith, president of the NAEA, said: "NAEA members are showing that there are buyers a-plenty out there. More often than not these are also potential sellers who are at the beginning of the process - so there is bound to be a lag which creates a shortage of properties in the short term."
