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Members of the National Association of Estate Agents (NAEA) reported that consumer confidence has slightly risen in May. The latest housing market survey presents evidence of a stable market, with consistency shown in the number of houses on agent’s books, the number of sales agreed and the time between instruction and sale. However, from the results shown, there is still a need for reassurance.

Chris Brown, President of the NAEA, comments: “The figures from the May survey indicate a slight confidence boost from consumers in the market with a rise in house hunters. A significant improvement is the percentage increase in first time buyer sales. This is great news as it suggests a lift in confidence in one of the most crucial groups and shows prices have fallen far enough to enable them to climb on the ladder. The figures reported by agents also highlights that as there are more choices available with the number of houses rising, this potentially gives the buyer more options.

“To maintain more stability or better yet, to restore more confidence, the NAEA continue to urge the government to help the market. We have called for measures such as a stamp duty holiday for first time buyers and temporary tax relief on the mortgage interest of people’s primary residence. We really want to see action from the government to ease pressure and give consumers hope for the future.”

First time buyers regain some confidence

The last couple of months have had a massive affect on first time buyers with the credit crunch and squeeze on mortgage approvals causing a lack in confidence. The start of the year saw potential as the figure stood at 14.5% in January, however this has dropped month by month, with last month being the lowest of the year, at 7.7%. May, however saw an increase as the number emerged to 10.6%, even higher then the same time last year. There could be a number of reasons supporting this month’s increase. Agents reported an increase in the number of houses available from the month before, which was 84 in April and risen to 97 in May. This increase gives the buyer more choices of houses and therefore makes it a buyers market. The difference between asking and sales price also increased to 5.1% which may indicate that people are having to be realistic in order to give first time buyers a chance.
House hunters on agents’ books increase

According to NAEA members, the number of house hunters on their books has increased in May to 247, in comparison to 237 the month before. This again, shows stability in the market and that house buyers have slightly gained confidence.
Housing stock increases

May figures presented a dramatic leap in the number of houses available compared to the month before. This suggests that it is a buyers market, as there are more choices available to them. Therefore, it may be easier for the buyer to find a property that suits them and their financial situation.
Average between asking and selling price increases

NAEA members reported a rise in the average difference between the asking and sale price. Consumers are most likely realising it is a buyers market and therefore could be offering lower then the asking price. This continues to show a dislocation between what sellers believe their house is worth and what the market is prepared to pay. This may also be distorting and lengthening the time taken to sell.

Sale remain stable for agents’

The average number of sales remains at 7, for the third month running, according to NAEA members. Showing that although down on last year there are still sales being made.
Regional Summaries from Branch Chairmen and Officials
Name - NAEA Branch Comment
Simon Dunn - Yorkshire Reality seems to be slowly dawning amongst sellers and estate agents that the 2008 property market is extremely price sensitive.

Over the last month, estate agents in the region have reported that more clients are now prepared to be realistic with their price. Often by taking their estate agent’s professional advice, the opportunity is increased of affecting a sale at an earlier date, or at minimum a better chance of influencing a potential buyer to view.

The underlying fact this year is that potential sellers are having to financially invest at the outset with the cost of a Home Information Pack when placing their property on the market. Last year the majority of homes which came onto the market did not have this expenditure. This demonstrates to a greater degree how serious a seller is about moving home in 2008 (although hardly any potential buyers ask to see the HIP!).
Colin Girling - Suffolk Although there were a few exchanges and completions in May the market remains exceedingly poor. There are some viewings and some offers being made, but just when you think a client is going to offer he disappears. Some offers are 15 to 20% below asking price and vendors are not happy with that situation, they think that their property is worth more. Instructions are reasonable but some agents are still operating a high price low fee approach which is unsustainable.
Alison Hatrick - Scotland The Scottish market in the Inverclyde area continues to beat the trends being shown in England. Whilst selling times have become more extended, prices are continuing to be maintained in most cases, although the lack of finance for first time buyers seems to be giving an advantage to buy to let buyers who are now returning to the lower end of the market.
Ian Harris – Norfolk Let’s face it, we are facing a difficult property market and the figures now being published by recognised and reliable sources are showing the effects of higher living costs and the credit squeeze in a lowering of property prices. However there is cause for optimism. The majority of would-be borrowers will still be able to get the mortgage funds they require, which has come as a pleasant surprise to a number of would-be movers I have spoken to recently. In fact, my impression is that lenders are still keen to do business with “normal terms” borrowers. The British public continues to love all things “bricks and mortar” and the popularity of our TV friends, Phil and Kirstie, are evidence of our continuing interest in the property market.

Here in Norfolk the market is currently offering an excellent choice of well priced property, giving buyers plenty of opportunity for some bargain hunting and/or taking their time to find that “ideal” home. When you do find that ideal property there will be a HIP to give you a head start with the legals and also there’s very little chance of getting gazumped!

So what can you buy in Norfolk? Well if your budget is £100,000 you can buy a home in county, city or coastal location. Shared equity is now looking a favourable option for buyers, reducing the minimum deposit and saving on monthly costs. I’ve recently seen a new 4 bedroom home for £100,000 on a shared equity basis. In the £200,000 to £300,000 range you’ll find some idyllic individual country property or high quality suburban homes. Over £300,000 will buy some very desirable property in some great locations around Nelsons County.

The letting market remains vibrant with plentiful numbers of tenants and properties. The most noticeable feature of the market here are the numbers of sellers deciding to let their properties instead of selling, matched by would-be buyers renting whilst they wait, either for the right property or the right deal. For the residential sales market this sounds like a pessimistic note to end this months comment on however, think of it this way: it may be delaying a recovery but as least this way of doing things does assume a recovery!
Andrew Knapp - South Cheshire, Merseyside, North Wales. Sales continue to be hard to come by (and to hold together) though vendors are becoming more realistic in their expectations. Certain areas in the region appear to be much harder hit than others with some members reporting almost zero activity. The letting market is buoyant except in specific areas with an oversupply of apartments.
Tim Denning – East Sussex The stable market continues, with more instructions available. The stamp duty issues will not go away, with applicants and vendors alike complaining at the level (over £250,000). This is where there is now lesser activity taking place.

The lettings market retains its strength, with many tenants taking a “wait and see” attitude with regards purchasing a property and therefore continuing to rent. Supply is an issue with a shortage created by many properties being snapped up very quickly.

Martin Paterson - Scotland The housing market in Dundee and Angus continues to be reasonably buoyant, despite the national picture. It is evident however, that there are more houses for sale than ever before, thus providing more choice for buyers and ultimately some houses are taking longer to sell. Traditional flats are still popular due to the transient student population in Dundee, and most newbuild under £250k are still moving, but the higher levels of £350k to £500 are bearing the brunt of the more difficult market conditions.
Michael Jones – South Wales. Sales are slow and enquiries have reduced, but there is still some activity in the market up to £250k. The stamp duty threshold then effectively kills off the market, and this together with the Government's nonsensical decision to continue with HIPs just adds to the woes of buyers and sellers. (Still no-one has asked to see a HIP, and they are not interested if you offer to show them one either!)

One other snippet of news - the local press announced last week that there are a further 9,500 apartments planned to be built in Cardiff Bay. Just what the market needs!

However, the lettings market (except for Bay apartments) is buoyant.

Investment buyers are "hovering", ready to buy up any bargains that come on to the market. They are particularly interested in the availability of repossessed properties.

Locally, there have been several "casualties" in the local estate agency sector, with offices being closed down, and staff being made redundant.

Joanna Cobb – Hereford & Worcester Herefordshire has been up and down this month, we had one of our best week’s EVER for sales but mostly buyers are still cautious, asking prices are more realistic, viewings are lower and owners mostly being fairly realistic as long as they can buy at a lower price also. We had our first ever HIP enquiry the other day; this was for a property for tender though, so it made sense. Owners are angry at having to pay for the HIP and those who are getting their solicitors’ to provide it are the ones that are taking longest, the HIP providers we have used are all working well.
Andy Goundry - Cornwall The residential market remains tough with new buyer registrations significantly down on a year ago. New properties to the market are less, however, last year there was a rush by many sellers to beat the original HIP deadline at the end of May. Supply currently outstrips demand. Many sellers have dropped their prices in an effort to find a buyer, but viewing levels remain well behind levels of a year ago. Competitive pricing remains the key to a successful sale. The initial price that a property comes to the market is the biggest decision, as it needs to be attractive to generate the required interest.
Richard Copus - Devon The main problem here at the moment is the dearth of viewings. Until a couple of months ago, most agents reported viewings on a par with 2007 and 2006, but with offers significantly down. Now the horses are not even drawing to water. There is a definite "fear" factor emanating from rocketing fuel and food prices which has stopped many people in their tracks. Once we all accept the fact that high commodity prices are here to stay and that life still goes on, then people will start looking at property again with eyes open to the fact that it is the one product which has dropped in price and is good value.

Editor Notes:
About the NAEA

The National Association of Estate Agents (NAEA), the residential sales arm of the National Federation of Property Professionals (NFOPP), is the UK’s leading professional body for estate agency personnel, representing the interests of around 10,500 members who practice across all aspects of property services both in the UK and overseas. These include residential and commercial sales and lettings, property management, business transfer, auctioneering and land.

The National Association of Estate Agents is dedicated to the goal of professionalism within all aspects of property, estate agency and land. Its aim is to reassure the general public that by appointing an NAEA member to represent them they will receive in return the highest level of integrity and service in both sales and lettings, for all property matters. Each NAEA member is bound by a vigorously enforced Code of Practice and adheres to professional Rules of Conduct. Failure to do so can result in heavy financial penalties and possible expulsion from the Association.

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