Property market stable but consumer confidence still shaky

Members of the National Association of Estate Agents (NAEA) reported that the picture is still very regional but elements of the market are stabilising. Members reported stability in the sales agreed, the number of viewings before a sale is secured and the average difference between asking and sales price.

Chris Brown, President of the NAEA, comments: “The figures from the April report suggest that the market is stable, however, consumer confidence is still dented. Properties supply is good but buyers are being cautious. It is apparent from the survey results that some people are adopting a ‘wait and see attitude’, watching the market, before making any decisions. Many, especially first time buyers, will be feeling the results of the credit crunch and tighter lending leading to them being unable to move onto the ladder or up the chain. Some agents are also finding it difficult to stop sales falling through as people get ‘cold feet’ or fail to secure mortgages but we must remember that this happens in the best of markets.

“However, what people need to remember is that the market is stable and we are not seeing massive price drops. There are still strong economic factors at play, such as high employment and low interest rates and sales are still taking place. Moreover, people need places to live and property purchase remains a good long term investment.”

Market stability

Number of viewings before a sale is secured remained stable at 14. This is indicative of buyers remaining cautious but still committed and is only up by two viewings on the same time last year. The average difference between asking and sales price remained at 4.7%, showing that although there is still a dislocation in this area sellers may be being more realistic.

House hunters on agents’ books decline

The number of buyers on agents’ books has dropped slightly. NAEA members reported an average of 237 house buyers on estate agents’ books in April compared to 249 in March 2008.

The drop in interest could be attributed to the current market conditions, including the effects of the credit crunch and difficulties in obtaining a mortgage. These factors are making consumers more cautious and hesitant to buy as there has been indication from sources that the market might improve.
Stock levels increase

The number of properties for sale on agents’ books increased this month as NAEA members reported that an average of 84 properties were available in April in comparison to 76 the month before. This indicates a shortage of buyers but could also be a result of a seasonal increase in instructions at this time of they year.
Stable sales for agents’

NAEA members have reported that they are still selling homes, with an average of 7 sales. This remains consistent with March’s figure and the sales figures have remained relatively stable since January this year.
First time buyers remain hesitant

It hasn’t been an easy time for first time buyers over the last couple of months, and it is no better this month, as agent’s reported a drop from 8.3% in March to 7.7% in April. The credit crunch and squeeze on mortgage approvals has affected the confidence of first time buyers in the property market. It has become more difficult for the first time buyer to secure a mortgage and this may be having an effect on the number of buyers from this category.

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