The National Association of Estate Agents (NAEA) has released figures from its latest housing market survey revealing an energetic market in the run up to the Budget. The number of sales agreed climbed dramatically in February, as interest rates and employment levels remained stable and buyers' confidence increased further.
Sales soared in February with a 30% increase, from 10 per agent to 13. This is an encouraging 10% rise on the same time last year, when estate agents reported an average of 12 sales per agent. With interest rates remaining stable and some experts now forecasting significant price rises for 2006, consumers were clearly feeling optimistic in February.
Following another positive trend, the average difference between asking and selling price decreased once again in February, from 3.7% to 3.5%. Realistic pricing has been a significant factor in the positive sales figures over the last few months, and is also helping to speed up the sales process. In good news for both buyers and sellers the average time taken to sell a property reduced again in February from 18 to 17 weeks. This was also a reduction on the figures witnessed at the same time last year, when the average time was 18 weeks.
Meanwhile, the number of viewings to achieve a sale remained level at 12 per sale, compared with 14 in February 2005. The number of buyer applicants on estate agents' books decreased in February from 355 to 322 in a fall of 9.3%, an 18.9% drop from the same time last year. This paired with a decrease in the number of properties on agents' books from 75 in February 2005 to 64 this month.
First time buyers took a smaller share of the market compared with the previous month, with a reduction in their share of the market further in February from 9% to 7.8%. A number of announcements regarding rises in council tax and utility bills way above the rate of inflation combined to hinder their progress, creating a greater challenge for young people attempting to save to buy a home. Adding to this pressure is the UK house price to earning ratio (HPE). 'Creator and Trader, A vision for growth in the UK mortgage market' a new book published by Stephen Knight, states that at six times the average income, the UK house price to earning ratio (HPE) is too high for most first time buyers.
