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Property surges
The National Association of Estate Agents (NAEA) has released the latest figures from its housing market survey revealing a surge of properties being placed onto the market in the run up to the anticipated June 1st HIPs launch.
Meanwhile, the number of house buyers on estate agents’ books remained level as purchasers continue to be affected by affordability issues coupled with the increasing cost of moving. The rise in interest rates at the beginning of the month is likely to serve as a further deterrent in the coming months. Encouragingly, sales figures also remained on a level in May.
Housing stock increases dramatically in anticipation of HIPs
Housing stock surged in May. Nationally, the number of properties per agent leapt 16.1% from 62 in April to 72. This is considerably higher than figures seen at the same time last year, when the average number of properties per agent was 66. It is in fact the highest figure recorded by the survey since December 2005. The dramatic increase is likely to be the result of a desire by homeowners to avoid the anticipated HIPs legislation, originally due to launch on June 1st. The latest numbers indicate the aversion of house sellers to the legislation and the lengths they are willing to go to avoid them.
The survey also indicates that;
Purchasers are hesitant in present buying environment
Despite the dramatic increase in properties on estate agents’ books in May, nationally the number of buyers remained stable in May, with only a marginal decrease from 348 per agent in April to 344, in a fall of 1.1%. When compared with May 2006 figures, however, this is a drop of 9.0% from the 378 buyers per agent last year.
This decrease in the level of buyers compared with last year’s figures demonstrates the affect of today’s turbulent buying environment on the housing market as individuals are not able to commit to property prices due to escalating costs. Factors include continuing interest rate changes, rapidly rising property prices and the general cost of everyday living. A number of homeowners are weighing up the options and instead, if viable, choosing to improve their present home in a bid to increase the value of the property and avoid the associated costs of moving.
Sales remain stable
The number of sales reported per agent remained level with 13 houses being sold per NAEA agent, the same as the previous month. This indicates that the market remains stable despite the uncertainty surrounding new legislation and continuing interest rate changes. However, the figure is still lower then the same time last year, when on average 15 sales per agent were made.
First time buyers continue to feel the pressure
The percentage share for first time buyers in the property market dropped from 10.3% in April 2007 to 8.9% in May, falling for the third month in a row. This continuing decrease in market share is concerning and the NAEA urges the Government to increase its efforts to assist this fragile sector of the market.
Slight movement for viewings and purchasing times
The number of viewings before a sale dropped from 12 in April to 11 in May 2007. These figures are below those recorded at the same time last year, when it was taking on average 12 viewings before a sale. Meanwhile, the time between instruction and completion rose slightly, from 15.8 weeks in April to 16.5 – a figure that is level with the same time last year.
Gap between asking and selling prices widens
The average difference between asking and selling price rose from an average of 2.7% to 2.9%, bringing it back to levels witnessed at the beginning of the year. In contrast with figures from May 2006, when the average difference was 3.3%, the gap between sellers’ expectations and reality has narrowed over the last 12 months. The slight widening again between April and May this year, however, could be an indication that sellers will need to be more competitive with their pricing in the future as more properties come onto the market.
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