October housing market buoyant says NAEA

The overall national picture for the property market in October showed a buoyant market place in advance of interest rate rises, reveals the National Association of Estate Agents.

However, it warns the national story is being led by the South East, whilst other regions are reporting a slow down in activity.

The vast regional differences mean that some areas of the country have housing markets that are beginning to falter.

Significantly, October saw a return of first-time buyers who increased their market share by the largest amount for over a year and a half.

The number of house buyers and houses for sale on estate agents books were both proportionally up from figures reported in September, although people looking to buy decreased from the same period last year.

Actual house sales remained level from September but had increased from October 2005.

First-time buyers made a dramatic return to the housing market in October 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 23.6% of the market.

This increase could be akin to a slow down in the market with first-time buyers taking advantage of a decrease in buyers on books.

However, the NAEA warns 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.

Reflective of 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 hike 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.

The percentage of failed sales in the housing market decreased in October to 8.4% from 9.85% in September.

NAEA president Charles Smailes says: 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.