Results from the July housing market survey conducted by the National Association of Estate Agents (NAEA) revealed continued strength and confidence in the market. July, a traditionally quiet month for estate agents, held steady from June and a clear year on year growth is evident in the market.
Detached house prices increased as demand outstrips supply; however a surplus in flats in some areas has led to a slight fall in asking prices.
The number of buyers on estate agents' books rose, as did available housing stock. Sales, despite being slightly down from last month, are up considerably from the same period last year. The first time buyer share of the market is also up from last year and the time taken to sell is on average over two weeks less than July 2005. The lettings market also saw a steady growth as the time taken to let decreased alongside the number of properties available.
Agents sold an average of 14 properties each in July, a 6% decrease from June where 15 sales per agent was reported. However sales are up by 40% compared to last July when agents sold just 10 properties each. The lack of a significant dip in sales during a month when many potential buyers and sellers are on holiday proves that the housing market is in great shape.
The average asking price for property within the UK increased from £203,727 in June to £207,011 in July, a 1.61% rise. Flats however decreased by 1.42%*. This could be as a result of the more competitive environment in this particular market where, in some areas, a significant number of new flats have been built over the past few years. Terraced, semi-detached and detached houses all increased, notably a lack of detached homes saw prices in this sector of the market rise by 3.57%. The difference between asking price and selling price remained level from last month at 3.1%. It is essential that agents and sellers remain realistic with pricing if the market is to remain healthy.
The number of buyers registered on estate agents books increased by 5% from June to July and was up by 10% from last July. On another positive note housing stock is beginning to be replenished and has increased by 20% from last July, with agents reporting an average of 66 homes for sale in 2006 compared to 55 in July 2005. These figures prove consumer confidence in the market, and an underlying strength that will enable the continuation of steady growth.
The first time buyer share of the market remained steady at 11.3%. This is significantly higher than the 7.8% reported twelve months ago. The foundation level of the market continues to need help to return to the 25% share that would be expected in order to further promote strength in the market.
The time taken to sell decreased slightly in July after the rise seen in June. As housing stock remained at the same level from last month it is encouraging to see this slight improvement. It took on average 16.95 weeks to sell in July 2006, compared to 17.05 weeks in June. Yet again the figures are more promising than those from twelve months ago when an average of nineteen weeks was reported. Sellers had to show their homes less than they did twelve months ago, as a typical home for sale was viewed 11 times in July 2006 compared to 15 in July 2005.
There was an increase in activity in the lettings market with the average time taken to let a property decreasing slightly from 12.72 days in June to 12.64 days in July. There was also a decrease in vacant properties by 13.3% from 15 per agent to 13. Lettings agents reported a 1.29% rise in rents last month, contributing to a 3.2% annual rise. This is bound to have an effect on the many young people currently priced out of the housing market and unable to save for the huge deposits now required to get onto the property ladder.
NAEA President, Charles Smailes, comments: "Things are looking up for the wider housing market. The market is clearly stable and the continuation of a reasonable supply of properties coming on to the market bodes well for the future. The market remains very positive at present and I am confident that it can withstand the quarter of a percent rise in interest rates announced at the beginning of August. I am not surprised to see house prices continue to rise and am pleased to see the gap between asking price and selling price at a reasonable level."
