The number of monthly transactions dropped as demand in the housing market generally fell sharply in the run up to Christmas.
House hunters’ attentions have been diverted elsewhere. Unsurprisingly, the number of first time buyers fell to another historic low of just 10.0%, as the impending cost of the festive season weighed heavily on other pressing priorities. Following this trend, the number of buyers registered with NAEA estate agents fell to an average of only 419 buyers on their books, this compared to a year high of 620 in June.
The number of new applicant enquiries also fell to a recent low of 112 (September: 126). The only time this year when agents have seen so few new applicant enquiries was the normally very quiet month of January.
However, matching the fall in demand, supply also fell sharply during October. The average number of properties currently available for sale with estate agents fell to 49 (from 61 in September) and the number of new instructions to sell fell to 14 from 16 in September.
With falls in demand matching those in supply, house prices remained stable: annual house price inflation for the country as a whole stood at 7.7%.
Outstanding property transactions have been rushed through as home hunters took quick decisions to move and be settled in time for the Christmas period. With the emphasis on moving quickly, buyers achieved less discount from the asking price (3.4% in October, compared with 3.9% in September), whilst the number of viewings before a sale was secured also fell sharply to 10.4 (average over year to date: 17.0). The total time from instruction to sell to exchange of contracts fell to 14.9 weeks (from 16.4 in September) as lower overall volumes enabled more efficiency in terms of the speed at which transactions were completed.
Melfyn Williams, President of the NAEA, comments:
“With the festive season now approaching fast and less than 30 shopping days left before Christmas, home hunters’ attention is fast being diverted – presents are taking priority over houses. Young potential first time buyers – for whom the festive season is an especially expensive time of year – are now just one in ten of all buyers.
“With a fall in the number of people looking to buy being matched by a fall in the number of people looking to sell, house prices have, however, remained stable. Lower volumes have helped speed up the house buying process and transactions are being processed as quickly now as they have been at any time this year.
“With Christmas just around the corner, the housing market is likely to become even quieter, but with house prices remaining stable and interest rates still low by historic standards, the housing market remains set for continued activity in the New Year, with gentle easing of price growth.”
