Can estate agents add up?

A report widely quoted today by the National Association of Estate Agents suggests that there are five buyers for every property that is for sale. In their October survey, the NAEA says that in each branch there were, on average, 287 house hunters and just 57 properties.

As someone who watches the property market and the endless reports pushed out by agents and lenders every month I like to think I have a pretty good understanding of the basic numbers and I also have a developed a ‘nose’ for someone who has been playing with figures.

The NAEA believe that there are about 10,000 agents so their own numbers suggest that there are around 570,000 homes for sale (I agree, I think there are around 680,000 across the whole country) and that there are 2.8million home buyers. It’s this second figure that I have a problem with.

If you are looking for a new house then you do two things. You register on the big property web sites like Globrix and Primelocation and you ring or call in and see the local agents.

Time was when there were dozens of estate agents in every town. These days there are far fewer (perhaps a 20% fewer, I calculate) but that still means that you would register with between three and five firms to make sure you have a decent chance of being called if a suitable property comes onto the market.

The NAEA won’t have been able to de-duplicate their figures to ensure that they have only counted each buyer just once and although there are a lot of properties on with more than one agent (counted twice again) the ratio of buyers to sellers will actually be much closer to 2:1.

The current volumes of new instructions and homes being sold confirm that the market is wafer thin. The six year averages of homes being sold is 3,730 a day. At present there are just 2,700 being sold. The average number of new homes coming to the market over the same period is 5,554 but today there are just 3,505.

Estate agency obviously requires many skills but basic maths doesn’t appear to be essential.