Housing market is stable despite mortgage struggles

27 May 2008 / by Joy Tibbs
Despite numerous reports that the housing market is currently in turmoil, members of the National Association of Estate Agents (NAEA) claim the sector became more balanced in April.

The association found that there was stability in the number of sales agreed, the number of viewings carried out before a sale was secured and the average difference between asking and sales price. However, mortgage restrictions continue to hamper some would-be buyers.

Data showed that the number of viewings held prior to a sale remained stable at 14, showing that buyers continue to be cautious yet committed. This is up by just two viewings year-on-year. Meanwhile, the average difference between asking and sales price remained at 4.7 per cent.

President of the NAEA, Chris Brown, said: "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.

The number of buyers on agents' books showed a slight decline, falling from an average of 249 in March to 237 in April. This marginal drop is likely to be linked to the impact of the credit crunch, which has made securing a mortgage more difficult.

"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," said Mr Brown. "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."

Different regions presented varying views of the current housing market situation, with some reporting stable sales, others recording a slowdown and some seeing a slight rise.

Andy Goundry an NAEA member in Cornwall said: "April has shown a glimmer of hope with most agents reporting slightly improved sales levels over the earlier months." However, Napoleon Wilcox in Somerset said: "There is no doubt that the West Country has seen a considerable downturn in the number of properties being sold," and Geoff Graham in the North East said: "The market overall continues to be much slower than 12 months ago with fewer sales taking place."

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