March housing market – calm before the storm

Figures released by The National Association of Estate Agents (NAEA) from its March housing market survey have revealed a levelling of activity in the residential housing market.

The market was seasonal in March, with buyers, sellers and completed house sales all at a similar level to the same period last year. March is traditionally a busier time in estate agency than February and the March figures reflect this, with a slight upturn in activity from last month.

First time buyers have maintained their improved market share from February and are up on the levels reported in March 2006 despite another imminently expected base rate rise.

Housing stock steady

The number of houses for sale in March increased by 8.7% from figures reported in February, as the traditionally busy spring period began to take hold. NAEA members across the country reported an average of 62 properties for sale in March, relatively level to the 61 recorded in March 2006.

As the realisation of the forthcoming expense of home information packs hit consumers, it is highly likely that those wishing to sell will accelerate their decision and put their homes on the market before the 1st June, potentially saving a considerable amount of money.

Buyers continue to register interest

The number of people looking to buy property increased in March by 11.6% from February and by 3.7% from the same period last year.

Demand continues to outstrip supply in the residential housing market throughout many parts of the UK, which in turn will continue to add an upward pressure on house prices.

Spring market starts to pick up pace

Average sales increased in March to 14 per agent from 13 in February. This is an expected level for the time of year and mirrors figures reported in March 06. As stock increase in the next couple of months, sales are likely to follow suit.

First time buyers hold steady

First time buyers held steady on their market share in March, claiming 12.6% of the market up from 12.3% in February. Encouragingly, this is up from 8.9% in March 2006, yet a far cry from the 25% a buoyant market would ideally see.

This weak sector of the market is set to struggle further if interest rates rise further in the coming months.

Home information packs to hit market

NAEA President, Charles Smailes, comments: “It appears that we are finally hitting a period of leveling in the residential housing market. However this is unlikely to last. There is a great deal of uncertainty in the market at the moment, the increase in interest rates and the implementation of home information packs (HIPs) are set to have a significant impact.

“I am currently hearing from NAEA members across the country who are seeing an increase in new instructions at present, in anticipation of HIPs. As the realisation of the new costs of selling a house hit home with consumers, many are accelerating their decision to move in order to save money.

“Post 1st June, I expect new instructions to fall significantly as home sellers will have their right to speculatively test the market for free taken away from them. This will have a further impact on the already low levels of housing stock across many parts of the country.”