Buyers take advantage as homeowners rush to beat HIPS

The November survey from the National Association of Estate Agents (NAEA) has revealed an increase in the number houses available and buyers on books as homeowners rushed to beat the 14th December HIPs deadline and potential purchasers took advantage of more favourable market conditions.

In particular, first time buyers’ share of the market increased in November. However, the number of sales agreed took a slight tumble for the time of year.

Stock levels rise as sellers spurred on by HIPs

The number of properties on agents’ books took an unusual turn in November as stock levels increased. With the final phase roll out of HIPs on 14th December, many owners of one and two bedroom homes were rushing to put their property on the market to avoid the additional costs associated with the Packs. NAEA members across the country reported an average of 77 properties for sale in November – compared with the 65 in October and 55 in November 2006 – taking stock up to levels usually seen in a busy autumn market

Favourable market attracts buyers

The number of house buyers on estate agents’ books rose slightly in November, with agents reporting an average of 290 buyers registered in comparison to the 282 recorded in October 2007. As conditions toughen for homeowners some buyers are being attracted back to the market. However, the figure is still down on November 2006, when 342 buyers per agent were reported. With rising interest rates, the ‘credit crunch’ and general uncertainty surrounding the market having deterred buyers recently, the shift from a sellers’ to a buyers’ market is luring some potential purchasers back in.

Further drop in sales

The number of sales agreed per agent was down again in November – with on average 9 sales reported per agent compared with 10 in October 2007 – as this year’s premature festive slowdown continues.

This figure is also down on the same time last year, when 11 sales per agent were reported. However, the market is still reasonably active for this time of year as sales continue to push through.

Alongside this, the percentage of sales agreed that fell through rose in November from 11.19% in October 2007 to 12.14%.

The percentage difference between asking price and sales price, however, remained steady at 4.2% in November 2007. This is up on last year’s November figure of 3.1% as the current buyers’ market allows individuals further room for negotiation on property prices. Now more than ever homeowners are being advised to be sensible about the value of their property in order to give themselves the best chance of a speedy sale.

First time buyers increase their market share

On a particularly positive note, first time buyers increased their share of the market from 9.2% in October to 10.1% in November. Whilst, this figure is down on the same time last year when first time buyers had 13.4% share of the market, it is encouraging to see that this figure has risen. With a surge of suitable first time buyer properties coming onto the market following the announcement of the HIPs roll out date, first timers have been placed in a slightly stronger position.

Looking ahead

NAEA president, Stewart Lilly, comments: “The market place over the past year has certainly been turbulent. Increasing interest rates, the global credit crunch and the phased implementation of HIPs have all had an unsettling effect.

“However, it now seems that there is some light at the end of the tunnel. While it is likely that prices will remain static in 2008, the potential for further interest rate decreases will fuel consumer optimism and hopefully help to restore confidence in the market.”