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| MONDAY 1ST AUGUST 2005 |
 MARKET
LOOKING GOOD FOR HOMEBUYERS
Now is a good time to buy property, according to the latest
figures from the National Association of Estate Agents (NAEA). House prices
remained almost static last month having gradually reduced since last August.
With the number of properties on agent’s books at record levels
in the second quarter of this year, it is certainly a buyer’s market.
The NAEA recorded an average of 78 properties being offered per agent
over the quarter compared with 55 in the same quarter of 2004, demonstrating
an increase of 29.4%.
Potential buyers, however, still seem reluctant. The survey recorded
378 applicants registered per agent over the second quarter of 2005,
down 23.9% from the 497 applications per agent recorded over the second
quarter of 2004. With interest rates remaining at generally low levels
and sellers willing to negotiate on prices, buying conditions are at
an optimum. Despite this, buyers are remaining hesitant and the NAEA
is now calling on the government to encourage potential purchasers back
into the market.
The second quarter of 2005 saw the first decrease in property values
over a 12-month period since 2003. House prices fell 2.9% compared with
the same time the previous year. The majority of home owners need not
be alarmed, however, as Chris Hall, president at the National Association
of Estate Agents, explained, "This reduction in value will only
affect those who have purchased property during the past 12 months. Those
who bought before will, in most cases, still be showing a gain in value
and home-owners intent on retaining their properties in the longer term
are unlikely to be affected."
Encouragingly, the number of people looking to sell their properties
is increasing. The average number of new instructions varied wildly last
year from between 10 and 16 per agent. It reached its highest point for
18 months during the first quarter of 2005 at an average of 18 instructions,
settling down to 17 in the second quarter.
Chris Hall commented, "With the number of homes on the market increasing
steadily over the past 18 months, and the number of people looking to
purchase property decreasing, buyers can take advantage of greater choice
in the marketplace."
There was an average of 90 new applicants registered per estate agent
in June, down by 36 compared to the same time last year.
Chris Hall said: "Although there are fewer new buyers registering
than last year, there are still a lot of people exploring whether or
not they should invest in property."
"Current housing market conditions are in favour of buyers, however
without incentive from the government they are unlikely to invest in
property. The Monetary Policy Committee should reduce interest rates
to help improve consumer confidence in the overall economy. A government
reprieve on the penalties buyers face when purchasing property, for example
by lowering stamp duty thresholds, would help encourage more people to
take the leap onto the housing market ladder."
However, the good news for those selling property is that they can help
the process by being realistic about the price they expect their property
to achieve. Chris Hall pointed out: "It’s a tough market for
those selling homes. The housing market is becoming saturated and, just
like any other sales market, prices need to be brought into line if properties
are to sell. Vendors need to price according to the sale prices of similar
houses not necessarily the price being asked. Quality advice from your
Estate Agent is vital."
"Buyers do have a lot of choice and know they can shop around for
a good deal. Sellers need to be flexible on their selling price if they
want to sell their property. However it is important to remember that
if you are selling and buying in the same market any agreed reduction
is relative and is therefore quite normal."
"The survey does confirm, however, that buyers should still be
able to negotiate an average of 4.5% below the asking price."
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