Housing market levelling out

Housing market activity is staying level with last year in showing steady growth, estate agents are reporting.

In its monthly look at the housing market, the National Association of Estate Agents (NAEA) reveals the average house price in March reached £223,731, up from £213,259 in February.

Agents report there are more houses for sale in March than in February, in keeping with the annual trend of an increase in selling activity in the springtime.

Each agent had an average of 62 properties for sale in March 2006, almost the same as the 61 per agent in March 2006.

The number of buyers was also up in March, 11.6 per cent more people registering their interest than in February, with the number of sales also going up to 14 per agent.

First-time buyer levels stayed at a 12 per cent share of the market in February and March.

"This weak sector of the market is set to struggle further if interest rates rise further in the coming months," warned the NAEA.

However, despite the steady growth and rising levels of activity, the NAEA is expecting "a great deal of uncertainty" when home information packs become compulsory on June 1st, and with the prospect of interest rate rises.

"I am currently hearing from NAEA members across the country who are seeing an increase in new instructions at present, in anticipation of Hips. As the realisation of the new costs of selling a house hit home with consumers, many are accelerating their decision to move in order to save money," commented Charles Smailes, NAEA president.

"Post June 1st, I expect new instructions to fall significantly as home sellers will have their right to speculatively test the market for free taken away from them. This will have a further impact on the already low levels of housing stock across many parts of the country."