New participants in the UK housing market increased significantly last month, as the annual January rush brought both increased numbers of sellers and applicant enquiries, according to data release today by the National Association of Estate Agents (NAEA).

Average property prices for the first month of the year remained steady, with minimal increases for both the annual and monthly figures. Estate agents report just over one per cent growth annually, due to strong prices in January 2004 when the market barely slowed for Christmas. However last month was the first time that house prices have not fallen month-on-month since May 2004 suggesting that the price correction may be at an end.

Market balance remains with buyers

Estate agents across the country reported a busy month, with both the number of houses being put on the market and the number of new applicant enquiries booming. However homebuyers remained in relatively short supply, with the number registered per agency still low compared to 2004, and especially low considering the current high stock levels. Sales agreed remain subdued but up from December’s low.

The competition for buyers ensured that discounts stayed high, with buyers achieving an average of 4% discount from asking price, reaffirming their strong position in what remains a buyers’ market. The only buyers that did not seem to be taking advantage of the market are the first timers, decreasing from 16% of total sales, to just 11.7%.

Richard Hair, President of the NAEA, comments: “Reports from estate agents throughout the UK are hugely positive, with news of high numbers of valuations and many new properties coming on to the market. However many buyers still seem to be waiting to see which way 2005 is going to take the housing market, and are taking a cautious approach in committing to purchases, resulting in sellers having to be competitive and realistic in their pricing to secure sales."

“With interest rates unchanged and the chance of them being lowered in the next few months, there seems to be little reason why the brisk activity seen so far will not continue into 2005. As a result, come Easter, we expect to once again be witnessing gently rising property prices across much of the country, with the doom-mongerers looking foolish once more.

“A side effect of this is of course that it does little to help those struggling at the lower end of the market. With first time buyers already at dangerously low levels, the necessity to help this group will only grow.”