Buyer Interest

by Mark Johnston

While house prices have remained unchanged on the whole in January and February 2012, there has been a marked increase in the number of potential home buyers searching for a property.

A monthly national housing survey found that buyer interest had its strongest growth in nearly 5 years. Many estate agents reported that the number of potential home buyers registering with them had grown by around 18% in February.

According to figures from the property analysis firm Hometrack, this is the highest rise since a 23% uplift in February 2007.

However, many analysts suggest that this is an ‘artificial boost’ brought about by first time buyers trying their up most to beat the end of the stamp duty holiday in March.

It is highly unlikely now though that any first time buyers that are looking to beat the stamp duty deadline will be able to push through a sale before it ends.

Although there has been a slight increase in the number of potential buyers coming on to the market, it has still been low and this may be due in part to the lack of mortgage finance which is and has been continuing to hold back many people.

A ‘key feature’ of the housing market has been the scarcity of homes for sale. The supply of homes for sale has only increased by 1.5% in the last 6 months.

Richard Donnell, director of research at Hometrack stated “as investors and first time buyers have no property to sell, the growth in demand out paced the increase in supply across the regions.

Although data has shown that the number of properties listed in December 2011 fell by 3.4% from the same time last year and in January 2012 they fell by 5.4% compared with the same time lat year.

Recent research has shown however, that there was a 15% boost in the number of properties listed in February 2012.

Although properties are now it seems gradually beginning to creep back on to the market ‘unrealistic prices’ are still holding back many more sales.

With this in mind however, according to a recent survey many home buyers are now offering less than the advertised cost of a property, despite the fact that more sellers are dropping their asking price than ever before.

Some data shows that the average asking price fell by 3.33% at the end of 2011 and one house price report suggested that the average property sold for around £9,000 less than the original asking price in the 3 months prior to December 2011.

Mark Smith, managing director of S1homes, suggested that “it would appear that while sellers are being less optimistic about prices they can achieve, buyers are still able to come in with offers under the asking price in these market conditions”.

Property sales in the first month of the year were however higher than any January since 2008, figures have shown.

The housing market tend to go through a ‘lull’ at the start of the year before activity picks up in the spring but this year there were 64,000 UK property sales during the month of January and this total was higher than the 52,000 sales in January 2011.

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