Estate agents ready for slowdown

17 May 2004
A third of UK estate agents are predicting a dramatic slowdown in house prices by the end of next year, a new survey claims.

Research conducted by the National Association of Estate Agents (NAEA) also found that the percentage of first-time buyers slipped again to just 14 per cent of total sales in April compared with 18 per cent in March.

Estate agents appear to be coming round to the Bank of England's prediction of a slowdown in house price inflation is inevitable following the boom in recent years.

Melfyn Williams, NAEA president, told Reuters news agency: "There are a lot of first time buyers out there who have gone a lot further than they should have done."

Mr Williams added that a sharp rise in interest rates could be "crippling" for such buyers.

House prices rose again in April, up by 2.9 per cent on the previous month and by 12.35 per cent compared with the same period a year ago, accelerating at the fastest pace in a year. The average house now costs £201,708.

Most estate agents remain confident that prices will continue to rise, with two-thirds saying there will be no housing market crash "in the foreseeable future", but the NAEA believes current growth is unsustainable.

The NAEA points out that the previously lucrative buy-to-let market is seeing yields tumble as prices and interest rates continue to rise.