Buyers returning and sales up despite fragile market

Friday, 24 April 2009 10:24 AM

House hunters are returning to the market, with a small increase in home sales, according to research out today.

The National Association of Estate Agents (NAEA) has seen some positivity coming back into the housing market; which follows reports this week from the Council of Mortgage Lenders (CML) and HM Revenue & Customs who said lending and agreed sales were on the up.

However, the NAEA has said the Chancellor missed an opportunity to help the housing market in the Budget, which was announced on Wednesday.

Signs the market was 'bottoming out' have been approached cautiously, with experts warning the housing market is still in a fragile state. However, the NAEA research found the number of house hunters registering with estate agents was up 12 per cent, with the number of agreed sales per agent increased from eight to nine, from February to March.

The average house price, however, was 6.38 per cent lower than the actual asking price, although this appears to have drawn first-time buyers (FTB's) back into the market.

NAEA member Richard Copus said: "The market has definitely been showing signs of a revival in March. But like the weather, it is likely to be changeable and must be treated with caution."

The NAEA said the increased sales per agent were "the largest average figure for more than a year and a great source of optimism for the industry", with the number of house hunters at their highest levels for a year, indicating home buyer confidence was returning. However, the story for sellers was somewhat more pessimistic, with the average number of properties on estate agents books falling from 74 in February to 67 in March.

The NAEA said: "This is a potentially worrying indicator, as it suggests that sellers are not confident of getting the best possible price for their property. It is likely to reflect a view that the period of consistent house price falls is coming to an end - meaning those with property to sell feel it might better serve their interests to delay for a number of months and try to catch an upturn."

Lee Bramzell, chief executive of PropertyIndex.com, said: "Over recent months we have seen a steady trickle of positive news from across the housing industry, suggesting that buyers really are being tempted back into the market. While we still have a long way to go before we return to strong house price growth I believe the tide is beginning to turn.

"Many buyers now believe that the bottom of the market is approaching and as a result, they are starting to take action to ensure they don't miss out."

The NAEA has said Mr Darling should have done more to help FTB's returning to the market, and that his extension on the Stamp Duty holiday will do little to encourage them to purchase their first home.

Chris Brown, president of the NAEA said: "This is a token gesture that will be presented as a benefit to first-time buyers but is in reality irrelevant to two thirds of them. Our figures show that first-time buyers came back to the market in droves in January, making up 25 per cent of sales.

"The figure has only dipped slightly since then and in March was 23 per cent. These measures by the Chancellor will do little to consolidate that resurgence in interest. If the number falls again next month then we will know that confidence is dropping in the wake of a botched Budget."

Sarah Garrod

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