Homeowners 'hold onto property as an investment'

Housing demand has soared ahead of supply in the capital as owners prefer to keep their property as an investment, estate agents have claimed.

According to figures from agent Kinleigh Folkard & Hayward, the number of buyers competing for each property in February was 58 per cent higher than at the same time last year.

At the same time, however, the number of properties for sale was 39 per cent lower than in February 2006.

Lee Watts, the managing director of the firm, said that people were increasingly reluctant to sell their properties due to the capital they had built up in their homes.

He said the London residential sales market was "highly competitive" and demand was far outstripping supply in areas from Muswell Hill and Mayfair to Peckham and Hammersmith.

Properties coming onto the market were being snapped up within a matter of days or sometimes hours and buyers were finding it increasingly difficult to secure their first choice of property, he added.

And according to the Council of Mortgage Lenders (CML), the lack of supply of housing is pushing up house prices.

"It is one of the key issues in the property market at the moment and one of the reasons why we have seen one of the lengthiest run of house price rises over the past ten years," commented CML spokesman Bernard Clarke.

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