Housing market holds steady in January

The latest housing market survey from the National Association of Estate Agents has shown a positive overall national picture in the residential housing market for the start of 2007.

Members have reported a steady market during January, with a good level of consumer confidence as the number of people registering to buy increased.

Housing stock remained at a steady level for the time of year, increasing from the low, but seasonal levels reported in December. However demand continues to outstrip supply in some parts of the UK.

Sales were at a reasonable level for the time of year and first time buyers continued to claw back their market share.

The quarter percent increase in interest rates in January, the third in a six month period, had an almost immediate impact on the market in some areas. 40% of members noted a downturn in activity after the Bank of England announcement.

Vast regional variations in market conditions continue to be a concern. The ever strong South East is over shadowing some other parts of the country, which fails to keep pace with the strong market conditions.

Sales on the up

There was an upturn in sales during January as the time of year encouraged people to engage in the search for a new home. Agents reported an average of 13 sales each in January this was an increase from 8 per agent in December, a respectable level for the pre Christmas market. Sales were up from the same period last year, when an average of 10 sales was noted.

Confidence in the market

The number of people registering an interest to buy increased in January by 4.6% from December, with agents reporting an average of 367 buyers each in comparison to 351 reported in December. This is also 3.4% higher than the levels recorded in January 2006 when agents had an average of 355 buyers on their books. This is indicative of confidence in the market as people continue to look to invest in bricks and mortar.

Housing stock increases

The number of houses for sale increased in January by 29% from levels reported in December. NAEA members had an average of 66 properties for sale, up from 51. This is in line with figures noted twelve months ago when agents reported an average of 67 properties registered for sale.

First time buyers

First time buyers managed to increase their share of the market in January, claiming 11.3% of sales in the market. This is encouragingly an improvement from the 9% share they held in January 2006, but still significantly short of the 25% that a buoyant market would hope for. January’s rate rise will inevitably hit this sector’s pocket the hardest and further rises could affect this upward trend.

Regional market holds steady

NAEA President, Charles Smailes, comments: “I am pleased to see that 2007 has started relatively well for the housing market. The overall picture is one of stability despite rate rises and other underlying growing difficulties such as increasing inflation and unemployment factors.

“Scaremongers who have long been predicting a market crash have been proved wrong. I wait with interest to hear how the market performs in February in the wake of the rate rise in January, and am relieved that the Bank of England opted to proceed with caution this month, resisting the temptation to raise them further.

“Over the past few months I have been made aware of the vast regional differences that are currently characterising the market in the UK. The South East continues to storm ahead influenced by higher wages and city bonuses, whilst other areas are slowing slightly.

“It’s always pleasing to see an increase in first time buyers coming onto the market and I hope this upward trend continues, although they have a large amount of ground to make up.

“2007 will undoubtedly be an interesting year for the market as home information packs come into force. This unknown quantity will certainly have repercussions on the market place. A petition urging the Government to rethink this initiative currently has over 6200 signatures, as members of the public begin to realise that they will have to pay to market their properties. I hope, in light of this, that we are still able to report a steady market towards the end of 2007.”