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Signs of improvement in housing market

Signs of improvement in housing market

Category: Mortgages

Updated: 16/02/2011
First Published: 16/02/2011

MONEYFACTS ARCHIVE
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Positive signs have been noted in the UK housing market after the National Association of Estate Agents (NAEA) reported that house hunter activity had started to increase.

The association's latest market report showed that house hunters began to return in January with demand figures reaching a six-month high.

An improvement was reported across both the supply and demand for housing compared with December, although the NAEA said this remains in-line with figures from the same time last year.

The number of people registering with estate agents to buy property improved from an average of 227 in December to 252 in January.

While both the end of the holiday season and back-log in demand following December's big freeze helped to boost activity in January, the NAEA suggests there is still a considerable number of people reluctant to enter the market.

The number of houses available for sale increased from 64 per branch in December to 69 per branch in January, indicating that demand for property can be met in the short-term, which will ensure stability.

The average estate agent sold six properties in January compared to four in December.

"It is encouraging to see activity levels begin to increase following the downturn we saw in December where bad weather and the Christmas festivities kept many house hunters away," said Michael Jones, president of the NAEA.

"However, when compared with our report from this time last year, the market is still showing signs of consumer reluctance. Macro-economic issues such as the VAT rise and interest rate pressures continue to put many people off searching for property."

The report also found that the proportion of sales made to first time buyers decreased slightly from 25% in December to 24% last month.

"What we need to see now is the FSA using its newly-gained powers of oversight to ease mortgage lending restrictions that are preventing so many first time buyers from entering the housing market," Mr Jones added.

"We must ensure that their aspirations for property ownership can be met."

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