Sellers market: sale prices achieved are an average 97.1% of the asking price indicating that buyers are prepared to pay more to secure the home they want [see graph 2]. Additionally, the ratio of buyers to number of homes for sale increased to 12:1.
The percentage of first time buyers fell again from 18% last month to 14% of total sales in April.
Estate agents confident of a healthy market – Two thirds of agents do not expect there will be a housing market crash in the foreseeable future, although one third are expecting a dramatic slowdown by the end of 2005.
Potential causes of a slowdown include further interest rate increases, the slowing down of the buy-to-let market, and terrorism
Estate agents across the country are reporting increased prices and more buyers on the market according to the latest figures from the National Association of Estate Agents (NAEA).
Prices up
The NAEA’s monthly survey of almost 10,000 agents across the country revealed that prices soared almost 3% (2.93%) last month. Property prices are currently over 12% higher than this time last year – the highest price increase since March 2003 – as the typical property price hit an average of £201,708.
The highest price rises were reported in Wales and the South West with London and the South East seeing steadier increases.
Sellers’ Market
Prices are being pushed up by continuing high demand from housebuyers. There is currently an average of 12 buyers for each property that agents have for sale. This seller’s market is reflected in the low discounts achieved off asking prices, with homebuyers paying only 2.93% less on average than the asking price, compared to an average of over 4% throughout 2003.
First time buyers pushed out
However, high prices across the board are pushing first time buyers out of the market, as the percentage of total sales fell to less than 14%, down from 18% in April last year.
Agents’ view on housing market crash
Two thirds of estate agents do not believe that the housing market will crash in the foreseeable future, however one third are expecting a dramatic slowdown before the end of 2005.
Agents believe this could be prompted by rising interest rates (46.3%), the slowing down of the buy-to-let market (19.5%), terrorism (9.8%) or media speculation (9.8%).
Melfyn Williams, President of the NAEA, comments:
“As the weather is hotting up so is the housing market, with strong annual and monthly price increases recorded across the country yet again this month.
“With prices continuing to rise there is inevitably talk of a crash. However it is looking unlikely that we will see dramatic falls this year, and when the market eventually slows down it will be a softer landing than the spectacular crash predicted by some doom mongers.”
For more information or to find an estate agent who is a member of the NAEA, please visit www.naea.co.uk or email [email protected].
