Housing News: Level of house hunters at a six month high

Research has found that the amount of people looking for a new house reached a six month high in January 2011. The average number of house hunters registering with estate agents reached 252, an increase from 227 in December, however this was still 13% lower than the figure in January 2010.

January also saw a slight increase in the amount of homes for sale with the average estate agent seeing 69 properties on their books, 5 more than in the previous month.

Experts have put the increase down to the festive season and a backlog from the freezing weather we experienced throughout December.

The increase in potential buyers and sellers has resulted in an increase in actual sales, with the average estate agents selling six properties throughout January, up two from December.

The president of the NAEA, Michael Jones, said: “It is encouraging to see activity levels begin to increase following the downturn we saw in December where bad weather and the Christmas festivities kept many house-hunters away.

“However, when compared with our report from this time last year, the market is still showing signs of consumer reluctance. Macro-economic issues such as the VAT rise and interest rate pressures continue to put many people off searching for property.

“What we need to see now is the Financial Services Authority using its newly gained powers of oversight to ease mortgage lending restrictions that are preventing so many first-time buyers from entering the housing market.”

The percentage of sales to first time buyers did fall by 1% in January, to 24% compared with the 25% in December.

Figures released by the Department for Communities and Local Government (CLG) showed house prices rose in December by 0.5%, which meant an overall increase in the average home price – 3.8% higher than the beginning of 2010.

London residents have seen the strongest gains in house prices with a rise of 6.9%

However, Howard Archer, chief UK and European economist at HIS Global Insight, has predicted that the rest of 2011 will not see such rises: “The CLG data do not materially change our view that house prices will continue to trend down gradually in 2011 after losing ground overall in the latter months of 2010.

“Specifically, we suspect that house prices will fall by around 5% in 2011 and end up losing around 10% from the peak levels seen in the first half of 2010.”