Wed, 19 Apr 06
Good news for the housing market as estate agents report house sales are up, first time buyer levels are up and time to sell property has fallen.
The monthly housing survey conducted by the National Association of Estate Agents has revealed that house sales have increased in March for the third month running demonstrating that consumer confidence really is back.
A fast paced market is also reported with the time taken to sell decreasing, also for the third month in a row. Meanwhile first time buyers have been reclaiming a larger share of the market whilst competing with a rise in investors looking for buy to let opportunities.
House sales have increased by an astounding 40% since January, from an average of 10 sales to 14 per agent in March; this is a 16% rise on March 2005. This surge in the property market has been assisted by reported increases in house prices by 3.4% in February, alongside cheaper borrowing with fixed mortgage interest rates reported to be at 4.72% on average in February 2006 compared to a rate of 5.23% March 2005.
A seller’s market
There was an 11.7% increase in the number of buyers in March with an average of 371 on estate agents’ books, and a 4.9% decrease in houses available, with an average of 61 houses per agent.
Demand continues to out strip supply in many areas of the market. Noticeably the gap between asking price and final sale price closed further, indicating that sellers are being more realistic, contributing to what appears to be a vigorous market.
First-time buyers slowly gaining confidence
In a positive step forward the first-time buyer share of the market increased in March from 7.8% to 8.9%. This is however considerably lower than the same period last year when first-time buyers’ share of the market was at a high of 22.3%.
The increase in the stamp duty level could have encouraged a few new buyers onto the ladder; however it is clear that this is not enough to ensure a healthy influx into the market.
Another reason behind the lift in the market could be a renewed interest in the buy-to-let sector, with well-founded public concern for financial stability in retirement.
NAEA lettings agents reported an increase in vacant properties from an average of 14 to 15 per agent. As more and more people buy a second property for financial benefits, it is possible this sector of the market could become saturated.
NAEA president, Christopher Hall, said: "It is wonderful to see confidence from both buyer and seller return to the housing market. The market is back on track, following a slight cooling-off and dip in 2005, the picture for 2006 is very positive indeed."
"I am delighted to see an increase in first time buyers and pray that this continues. Going forward, I would like to see more new instructions so that supply continually meets demand curbing boom prices and allowing the industry to continue to steadily grow."
"In January I commented that I was confident average house prices would increase by up to 100% over the coming 10 to 15 years. Looking at the latest figures I believe we are still well on track for this."
Back to: News Index