October saw a return of first time buyers, who increased their market share by the largest amount for over a year and a half, according to figures from the National Association of Estate Agents (NAEA). First time buyers have made a dramatic return to the housing market, increasing their market share to an encouraging 16.4%, up from 11.1% in September. This is the highest percentage of first time buyers reported since April 2005 when first time buyers accounted for a healthy 23.6% of the market.
This increase could be indicative of a slow down in the market, with first time buyers taking advantage of a decrease in buyers on books. However, the interest rate rise will certainly work against this vulnerable sector.
Completed sales in October remained at a level from the previous month revealing a consistent housing market. Agents reported an average of 14 sales each, as buyers rush to move before the forthcoming festive period. Reflecting the strong market seen throughout 2006, sales had increased by 7.7% from the same period last year, increasing from 13 sales per agent.
The number of people looking to buy property increased in October by 4% from September as estate agents were involved in the yearly pre Christmas rush. However, buyers were down by 3.5% from the same period last year as consumers in some parts of the country could have been deterred by the widely anticipated rise in interest rates at the start of November.
Housing stock replenished slightly in October with an average of 64 properties for sale per agent, up from 61 in September, a 4.9% increase. This is also a 4.95% increase from October 2005.
NAEA President, Charles Smailes, comments: "October is often a busy month in estate agency as people endeavor to be in situ before the festive period, which means realistically they need to be agreeing a purchase in the next couple of weeks. I am delighted to see some first time buyers coming back to the market, but I am also concerned that the rise in interest rates and the further rises rumored for the New Year will significantly disadvantage people trying to climb onto the property ladder. The overall picture is that of a healthy active market, however regional difference applies, with some areas beginning to look quite flat, whilst the South East looks extremely strong. I encourage sellers to take heed of their estate agents advice and lower asking prices where necessary in order to attract a sale."
