NAEA members reported a rise in demand amongst house hunters and also an improvement in the number of offers from sellers – signaling a recovery following the traditional December slump but largely still in line with figures reported at the same last year.
The number of registered house-hunters reached the highest level in six months, from an average 227 in December to 252 in January. Given the latent build-up in demand following December’s adverse weather conditions and with the holiday season over, a number of people have begun to focus once again on the process of buying or selling a home again.
Housing stock availability grew from an average of 64 in December to an average of 69 in January. This encouraging supply data suggests that demand for property can be met in the short-term, which will ensure that house prices do not overheat and the market remains stable.
However, while significant gains have undoubtedly been made across January, the overall picture is one of a housing market that has some way to go to reach demand levels reported a year ago. January 2010 data shows that that the number of registered house-hunters reached an average of 291. Macroeconomic factors have added considerable pressures to consumer confidence.
January saw continued uncertainty about the long-term impact of the VAT rise, the prospect of an increased tax burden set to be introduced in April, and interest rate pressures which are continuing to keep many house hunters away. While consumers are showing signs of an increase in activity, it is unclear whether this can be sustained.
House sales during January also rose in line with enquiry figures, increasing from an average of four sales per branch to six. While this same figure was recorded at the beginning of 2010, average sales across last year regularly reached seven or eight per month per branch, suggesting there is still considerable reluctance to enter the market.
The percentage of First Time Buyers (FTBs) entering the housing market was the only figure to decrease in January, moving one percentage point from 25% to 24%. While this represents a reduced market share for those looking to get onto the housing market, the drop is much smaller than anticipated.
However, there is still clearly a need for banks to lift restrictions on mortgage lending to assist FTBs – a consumer group that is critical to the wider health of the market – and to ensure that their aspirations for property ownership can be met.
To summarise, January marked a positive start to the New Year, with relative increases across both supply and demand elements of the market. However, the figures show that there is still a way to go to achieve demand levels reached last year.
It remains to be seen whether this recovery can be sustained throughout February and March following the planned introduction of new FSA regulations governing mortgage lending and with other financial pressures being exerted on consumers.
NUMBER OF HOUSE-HUNTERS
The average number of house-hunters registered per branch increased from 227 in December to 252 in January.
Throughout much of 2010, demand for property fluctuated but remained at sustained levels. Although the highest it has been for six months, January’s figure of 252 is down on the same time last year which reached 291.
The latent build-up of enquiries as a result of the adverse weather conditions in December and the end of Christmas festivities are likely to have contributed to the increase in January, but confidence in the market needs to be much higher if this figure is to increase.
SALES PER BRANCH
The average number of sales agreed per branch increased with an average of 6 sales made in January compared with 4 in December.
It is encouraging to see that sales also increased in line with demand although there is still considerable reluctance in the market given the wider macro-economic pressures, such as uncertainty over the impact of the VAT rise and increased interest rates. It will be interesting to see if this figure can continue to rise to levels seen throughout 2010.
HOUSING STOCK
The average number of properties available for sale per branch increased from 64 in December to 69 in January.
Housing stock availability increased to levels last seen in September 2010, when an average 72 homes were available per NAEA branch. January’s figure is actually higher than this time last year, (55), suggesting that supply can meet demand and meaning house prices should remain stable.
FIRST TIME BUYERS
The percentage of first time buyers (FTBs) decreased slightly from 25 in December to 24 in January.
It is worth noting that this is the only figure that has actually decreased in this month’s market report, and by only one percentage point.
However, because FTBs represent a significant consumer group within the housing market, it is important that they are given the necessary assistance to enable them to enter the housing market to drive it forward. Mortgage lending must increase if this figure is to increase.
REGIONAL SUMMARIES FROM BRANCH CHAIRMEN AND OFFICIALS
Mark Bentley, Birmingham Branch
"Typically, the first week or so was quiet as everyone recovered from their Christmas and New Year celebrations and took down the decorations etc. The second and third weeks were slowly but surely increasingly busy as the first batch of potential property buyers and sellers who made a New Year’s resolution to move contacted local Estate Agents.
"They arr
