Property sellers hold back as demand increases

The UK housing market in June saw a rise in demand for property while housing stock levels decreased for the first time in four months, according to estate agents.

The National Association of Estate Agent's market report for June showed an increase in the number of house hunters registering with an agent across the country. The figure rose from 265 in May to 279 in June as an average per branch.

The percentage of sales made to first time buyers remained the same as in May at 21 per cent, which suggests that although the increase in the Stamp Duty threshold to £250,000 didn't affect this category, it might be attributed to aiding the wider buyers market.

The number of houses available for sale saw a slight decrease from 62 per branch in May to 59 in June while the number of sales fell from eight to six per branch on average.

NAEA President Michael Jones said: "It's encouraging to see that increasing numbers of buyers have entered into the market. There is clearly demand for property at present but these figures suggest that the banks are still being restrictive in their mortgage lending policies to buyers.

"The fact that sales didn't match this demand is most likely a result of the unclear picture at the start of the month. Buyers and sellers were expecting a hike in Capital

Gains Tax (CGT) that although proved less severe than first thought, meant there was a hiatus in activity as both waited for the full facts to be established after the emergency Budget.

"If the banks ease up on mortgage lending restrictions then with a bit of luck, the summer months will see the sales figure rise in line with demand."