UK Property: Buyer Interest Not Translating to Sales, NAEA Report

The National Association of Estate Agents released its report into the UK property market today. The report showed that the body's previous report of increased sales in the first fortnight in January may have been nothing more than a new year burst in activity, not signs of a sustained growth in sales of UK property. This is bad news for my own optimism that increasing sales could slowly trigger a UK property market recovery.

The NAEA report found an increasing amount of buyers in the market, up to 242 from 200 in December, but that this had not translated into increased sales as it should. Sales remained at an average six per agent, but according to the NAEA a promising 25% of sales went to First Time Buyers.

The earlier NAEA press release said agents had an average of 4 sales in the first fortnight of January, which was equal to the monthly averages in November and December. The average agent sales now being at 6 for the whole month of January shows that this was a New Year burst in the first fortnight that has slowed in the 2nd fortnight. None the less it is also shows sales in January increased 50% compared to November and December. I will be awaiting the NAEA's figures for the first fortnight in February with baited breath.

The earlier release also put first-time Buyers at 22.5%, the fact that this continued to grow in the last fortnight is promising. 25% is also the percentage the NAEA has said is necessary for a healthy property market.

The NAEA attributed the failure of buyer activity to translate into sales, in part to housing stocks falling; agents had an average of 75 houses on their books in January, down from 100 in December, which they put down to over optimistic vendors taking their properties off the market rather than drastically dropping their price.

According to the report properties in the UK sold for an average of 8.1% less than their asking price.

Chris Brown, President of the NAEA, said: "It is great that the pent up demand for housing in Britain -- which the NAEA has long stressed was there -- is now registering its interest with agents and beginning to look at property.

"But one positive sign in the housing market simply cannot be taken to represent the beginnings of a recovery. The number of sales per agent has held steady for the past three months and remains higher than it has over previous months. "this is a good sign but frustrating as the evidence suggests it could increase substantially if mortgages were more easily available."