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Property market 'unsustainable' as number of homes for sale falls to record low

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illo

The property market is "unsustainable" after growing demand from investors to buy homes depleted stock levels to a record low.

The warning came from Propertymark, a trade body, which reported that the number of properties for sale dropped to an average of 21 per estate agent branch in October, the lowest ever recorded.

Stock levels are 46pc lower than in the same month last year, but buyer demand is unabated. An average of 511 house hunters registered with each estate agent in October, up from 458 the month before.

That means there are currently 24 buyers per available home on the market.

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Despite this rising demand, the number of sales agreed over asking price has fallen. Last month, 21pc of homes were sold over asking, down from 27pc in September.

Nathan Emerson, of Propertymark, warned the housing market had grown "unsustainable". He said: "Estate agents across the country are working with some of the lowest levels of available homes we have ever seen yet demand from buyers is not easing.

"The festive period should take some of the heat out of the market, but with so many buyers still hungry for a new home, sellers would do well not to put moving plans on hold for too long."

This demand has been boosted by buy-to-let investors, who have been tempted back to the market by huge tenant demand and the promise of attractive yields.

The share of homes bought by an investor increased from 9pc in September to 13pc last month, according to Propertymark.

Average monthly rents outside of London have risen at the fastest rate in more than a decade, according to property website Zoopla, as competition for homes in city centres surged. Meanwhile, demand for rentals is at a record high, according to trade body the National Residential Landlords Association. Those in the capital have reported a "significant" resurgence.

Demand was also stoked by first-time buyers, who bought a quarter of all homes sold in October. This was a slight drop on its 28pc share in September, as young buyers used lockdown savings.

In the first six months of this year the number of first-time buyers soared to heights not seen in a decade, according to recent research by the mortgage lender Halifax. Almost 211,000 bought for the first time despite record house price growth and increased competition during the stamp duty holiday.