NAEA: BUDGET MEASURES WON’T IMPACT MARKET TRENDS

Housing market measures outlined this week by Chancellor Alistair Darling will not impact current housing market trends, the latest NAEA market report suggests.

The report shows that the number of people registering with estate agents shot up by more than 12 per cent between February and March – from 240 per agent in February to 268 in March.

President of the National Association of Estate Agents Chris Brown said: “The Chancellor’s announcement on mortgage guarantees will hopefully assist these people to translate their interest into a purchase.

“There is no justification for responsible people being denied access to appropriate finance, and with luck this should help reverse that situation, which has stagnated the market over the past 12 months.”

However the NAEA is clear that not enough was done by Mr Darling to improve the situation of first time buyers. Mr Darling announced an extension of the stamp duty threshold of £175,000 until the end of the year. The NAEA had called for it to be scrapped or suspended and reviewed.

Mr Brown said: “This is a token gesture that will be presented as a benefit to first time buyers but is in reality irrelevant to two thirds of them. Our figures show that first time buyers came back to the market in droves in January, making up 25 per cent of sales.

“The figure has only dipped slightly since then and in March was 23 per cent. These measures by the Chancellor will do little to consolidate that resurgence in interest. If the number falls again next month then we will know that confidence is dropping in the wake of a botched Budget.”

While the NAEA has been pleased to note positive indicators in the housing market, the fact that house prices are continuing to fall is a source of concern and underlines how the market is still in real difficulties.

In March, NAEA figures reveal that house prices were selling on average 6.8 per cent lower than their asking price.

Mr Brown said: “This underlines the root problem of the Chancellor’s Budget. He has certainly not done enough to stimulate the market to the extent that house prices will begin rising.

“Likewise, however, he has not done enough to enable buyers to take full advantage of the falling prices.

“There are measures in his Budget that are welcome – particularly the £500m commitment to improve the housing stock – but nothing has been done that will radically change the direction in which the market is headed.

“What we must hope for is that those positive signs in the market are able to take root and drag the market out of its slump – with or without help from the Chancellor.”