Following the July slowdown, the NAEA’s research has shown that the number of people looking to purchase a home increased slightly in August with agents reporting a rise of 3.8, with an average of 326 buyers registered on their books in comparison to the 314 recorded in July.
However, with uncertainty clouding the economic climate, the majority of these figures were still down on the same time last year.
Property stock
The overall number of houses for sale also increased in August, with NAEA members reporting an average of 81 properties for sale during the month compared to the 45 properties reported in July.
However, agents reported that the number of four bedroom and larger properties on the market decreased on average by around 37% in August as the first phase launch of Home Information Packs (HIPs) began to take its toll.
The number of sales reported increased in August, with an average of 12 houses sold per agent compared to the 10 properties sold per agent in July.
Levels are down from those experienced this time last year, when NAEA agents reported an average of 15 sales agreed. This decrease may be partially attributed to the recent economic movements and introduction of the HIPs legisation.
The share of the market attributed to first-time buyers dropped to 9.7%, compared with 13.4% in August 2006.
Hesitant sellers
The average time taken to sell a property increased by just over a week when compared with this time last year, when it reportedly took on average 17.0 weeks in August 2006 to 18.2 in 2007.
Regrettably, the percentage of agreed sales that fell through also decreased from 9.64 in August 2006 to 10.7 in August 2007, the highest figure recorded since the survey began.
This latest finding indicates the increased uncertainty that is occurring in the market place as economic factors have a profound effect on consumer confidence.
Average difference between asking and selling price widens
The average gap between asking and selling price also widened further with agents reporting a difference of 3.5% in August 2007, compared to 3.1% the same time last year. The last time a gap this wide was reported was in February 2006.
The NAEA is warning homeowners to be more realistic with the property pricing as the market faces a period of adjustment. Particularly with house price inflation slowing at the moment, buyers are far less willing to accept over-the-odds valuations.
Period of stability needed
NAEA president, Stewart Lilly, comments: “The housing market needs a period of sustained stability to allow people to take stock of the current situation and think carefully about their own personal options.
“Over the last forty years I have seen many peaks and troughs in the market and at this present time I cannot see any troughs on the horizon. Indeed, with housing demand still outstripping supply this will of course continue.
“The latest figures indicate that a period of low house price inflation may well be on its way. However, the recent introduction of the second phase of HIPs is likely to cause more disruption and in particular prompt a ‘wait and see’ strategy from individuals who are unsure about the full impact of the legislation.”
