The average property price in the UK fell again by a further 1.2% last month, but finished 2004 on average 6.4% higher than a year ago according to data released by the National Association of Estate Agents (NAEA).

However estate agents across the country report that activity is starting to increase and are on the whole expecting the market to pick up once again, with 95% expecting this to happen by Easter at the latest, and over a half of all agents surveyed expecting an upturn in January.

Market balance shifts to buyer

There was little movement in the supply and demand figures, showing only a marginal decrease in the number of buyers and the new instructions, as expected at this time of year. However, despite a slight decrease, the number of houses available is

higher than at the same time in previous years, indicating that the market has the scope for strong recovery from the annual Christmas slowdown.

Agents report that sensibly priced properties are selling well and this is reflected with the news that buyers are achieving an average discount of around 5% from asking prices, further demonstrating the shift in the balance of the market towards a buyer’s market.

First timers returning

Over the second half of last year, as average prices stabilised, property became more affordable for many and the percentage of first time buyers rose. This level looks set to be sustained in 2005.

First time buyers currently comprise 16.1% of total sales, compared to less than 10% at the end of the summer when house prices were peaking.

Positive outlook

Amid media reports that some estate agencies may face trouble this year in the face of a slowing market, there seems to be little evidence of struggling agencies amongst the 10,000 members of the NAEA. Almost 80% of estate agents surveyed reported that they are expecting their business turnover to remain the same or increase by the end of this year.

Richard Hair, President of the NAEA, comments: “Although there are anecdotal reports that some estate agencies are struggling, we have not seen evidence of any NAEA members closing shop."

"The current downturn will prove to be short-lived and the figures we are reporting this month show that annually, prices are up by over 6%, and activity is good for the time of year. Together with the upbeat reports we are receiving from the agents on the front line, and the wider economic conditions such as low interest rates, we fully expect UK house prices to be showing positive monthly growth again by the spring.”